**Understanding Ireland's Production Possibilities Frontier (PPF)**Suppose Ireland produces only two goods: barley and cars. The following graph illustrates Ireland's current Production Possibilities Frontier (PPF), showcasing six output combinations represented by black points (plus symbols) labeled A to F.**Graph Analysis:**The graph has two axes:- The y-axis represents **Cars (in millions)**.- The x-axis represents **Barley (in millions of bushels)**.**Points on the Graph:**- **Point A**: Located at approximately 90 million bushels of barley and 30 million cars.- **Point B**: Located at approximately 50 million bushels of barley and 70 million cars.- **Point C**: Located at approximately 10 million bushels of barley and 10 million cars.- **Point D**: Located at approximately 10 million bushels of barley and 30 million cars.- **Point E**: Located on the PPF curve at approximately 46 million bushels of barley and 36 million cars.- **Point F**: Located on the PPF curve at approximately 60 million bushels of barley and 10 million cars.**PPF Curve:**- The PPF curve shows the maximum possible output combinations of barley and cars that Ireland can achieve, given the resources and technology available. Points E and F lie on this curve, indicating efficient production points where resources are fully utilized.- Points lying inside the curve, such as D and C, indicate underutilization of resources (inefficiency).- Points lying outside the curve, such as B and A, represent unattainable combinations with the current resources and technology.**Interpretation:**The concept of the PPF illustrates the trade-offs between the production of two goods. Moving along the PPF involves shifting resources between the production of barley and cars, highlighting opportunity costs. For example, producing more barley involves sacrificing some car production and vice versa.Understanding the PPF helps in understanding the efficient allocation of resources, the opportunity cost of production choices, and the potential for economic growth and increased production capabilities through advancements in technology or resource availability. ### Efficiency and Attainability of Output CombinationsComplete the following table by indicating whether the output combination each point represents is inefficient, efficient, attainable, or unattainable.(**Note:** Check all that apply.)| **Point** | **Inefficient** | **Efficient** | **Attainable** | **Unattainable** ||:--------:|:---------------:|:--------------:|:--------------:|:----------------:|| A | ☐ | ☐ | ☐ | ☐ || B | ☐ | ☐ | ☐ | ☐ || C | ☐ | ☐ | ☐ | ☐ || D | ☐ | ☐ | ☐ | ☐ || E | ☐ | ☐ | ☐ | ☐ || F | ☐ | ☐ | ☐ | ☐ |#### Instructions: - Check the boxes corresponding to the categories (inefficient, efficient, attainable, unattainable) for each point (A, B, C, D, E, F). - A point can be categorized under multiple categories if applicable.

As wants and desires of the residents of the economy are unlimited but the resources possessed by…

Complete the following table by indicating whether the output combination each point represents is inefficient, efficient, attainable, or unattainable. (Note: Check all that apply.) Point Inefficient Efficient Attainable Unattainable B C O O00 00 OOO0 OO0O O OO O0

Complete the following table by indicating whether the output combination each point represents is inefficient, efficient, attainable, or unattainable. (Note: Check all that apply.) Point Inefficient Efficient Attainable Unattainable B C O O00 00 OOO0 OO0O O OO O0

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Cost of Production

In economic theory, production costs are the costs incurred by an industrial organization when it engineers a project or provides a service that generates revenue and benefits. Labor costs, raw materials, consumable manufacturing costs, and general overhead sum up, accounting for production costs. Total cost data is calculated by combining total direct costs of materials, labor costs, and total production costs.

Question

**Understanding Ireland's Production Possibilities Frontier (PPF)**

Suppose Ireland produces only two goods: barley and cars. The following graph illustrates Ireland's current Production Possibilities Frontier (PPF), showcasing six output combinations represented by black points (plus symbols) labeled A to F.

**Graph Analysis:**
The graph has two axes:
- The y-axis represents **Cars (in millions)**.
- The x-axis represents **Barley (in millions of bushels)**.

**Points on the Graph:**
- **Point A**: Located at approximately 90 million bushels of barley and 30 million cars.
- **Point B**: Located at approximately 50 million bushels of barley and 70 million cars.
- **Point C**: Located at approximately 10 million bushels of barley and 10 million cars.
- **Point D**: Located at approximately 10 million bushels of barley and 30 million cars.
- **Point E**: Located on the PPF curve at approximately 46 million bushels of barley and 36 million cars.
- **Point F**: Located on the PPF curve at approximately 60 million bushels of barley and 10 million cars.

**PPF Curve:**
- The PPF curve shows the maximum possible output combinations of barley and cars that Ireland can achieve, given the resources and technology available. Points E and F lie on this curve, indicating efficient production points where resources are fully utilized.
- Points lying inside the curve, such as D and C, indicate underutilization of resources (inefficiency).
- Points lying outside the curve, such as B and A, represent unattainable combinations with the current resources and technology.

**Interpretation:**
The concept of the PPF illustrates the trade-offs between the production of two goods. Moving along the PPF involves shifting resources between the production of barley and cars, highlighting opportunity costs. For example, producing more barley involves sacrificing some car production and vice versa.

Understanding the PPF helps in understanding the efficient allocation of resources, the opportunity cost of production choices, and the potential for economic growth and increased production capabilities through advancements in technology or resource availability.

### Efficiency and Attainability of Output Combinations

Complete the following table by indicating whether the output combination each point represents is inefficient, efficient, attainable, or unattainable.
(**Note:** Check all that apply.)

| **Point** | **Inefficient** | **Efficient** | **Attainable** | **Unattainable** |
|:--------:|:---------------:|:--------------:|:--------------:|:----------------:|
| A | ☐ | ☐ | ☐ | ☐ |
| B | ☐ | ☐ | ☐ | ☐ |
| C | ☐ | ☐ | ☐ | ☐ |
| D | ☐ | ☐ | ☐ | ☐ |
| E | ☐ | ☐ | ☐ | ☐ |
| F | ☐ | ☐ | ☐ | ☐ |

#### Instructions:
- Check the boxes corresponding to the categories (inefficient, efficient, attainable, unattainable) for each point (A, B, C, D, E, F).
- A point can be categorized under multiple categories if applicable.

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