Imagine a country XYZ that produces only two goods—chairs and tables. Together, the chairs and tables industries use all of the economy’s factors of production. The table below shows the production possibilities for XYZ: Production Possibilities for XYZ Chairs Tables 600 0 450 150 300 250 150 325 0 375 a. Draw a Production Possibility Frontier for the country using the information in table above. b. What is the opportunity cost of increasing chairs production from 450 chairs to 600 chairs? c. What is the opportunity cost of increasing tables production from 250 tables to 325 tables? d. Plot the point denoting 300 chairs and 300 tables on your graph above. Is this point “feasible”? Why or why not? e. Plot the point denoting 300 chairs and 50 tables on your graph above. Should XYZ be producing at this point? Why or why not?
Imagine a country XYZ that produces only two goods—chairs and tables. Together, the chairs and tables
industries use all of the economy’s factors of production. The table below shows the production
possibilities for XYZ:
Production Possibilities for XYZ
Chairs Tables
600 0
450 150
300 250
150 325
0 375
a. Draw a Production Possibility Frontier for the country using the information in table
above.
b. What is the
chairs?
c. What is the opportunity cost of increasing tables production from 250 tables to 325
tables?
d. Plot the point denoting 300 chairs and 300 tables on your graph above. Is this point
“feasible”? Why or why not?
e. Plot the point denoting 300 chairs and 50 tables on your graph above. Should XYZ be
producing at this point? Why or why not?
Trending now
This is a popular solution!
Learn your way
Includes step-by-step video
Step by step
Solved in 4 steps with 1 images
