Below is the production possibilities table for consumer goods (maize) and capital goods (tractors): Type of production Production possibilities A B C D E maize 30 27 21 12 0 Tractors 0 2 4 6 8 i. Show these data graphically. ii. If the economy is at point C, what is the cost of one more unit of maize? iii. Suppose improvement occurs in the technology of producing tractors but not in the technology of producing maize. Draw the new production possibilities curve. iv. Now assume that a technological advance occurs in producing maize but not in producing tractors. Draw the new production possibilities curve. v. Now draw a production possibilities curve that reflects technological improvement in the production of both goods.
Below is the production possibilities table for consumer goods (maize) and
capital goods (tractors):
Type of production
Production possibilities
A B C D E
maize 30 27 21 12 0
Tractors 0 2 4 6 8
i. Show these data graphically.
ii. If the economy is at point C, what is the cost of one more unit of maize?
iii. Suppose improvement occurs in the technology of producing tractors but not in the
technology of producing maize. Draw the new production possibilities curve.
iv. Now assume that a technological advance occurs in producing maize but not in
producing tractors. Draw the new production possibilities curve.
v. Now draw a production possibilities curve that reflects technological improvement in
the production of both goods.
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