Suppose a nation has a total of 12 units of labor, which can be used to produce either guns or butter. One gun takes 6 units of labor to produce and 1 butter takes 2 units of labor to produce. Evaluate the allocation of resources of this country based on the following points. • Reason for the scarcity that exists in this economy. Use the data as evidence of your reasoning. • Maximum quantity of guns that can be produced. • Maximum quantity of butter than can be produced. • Diagram which represents the nation’s production possibility curve. • Opportunity cost of guns in this nation • Reason why the nation can’t produce both 3 guns and 4 butters. • Reason why the nation shouldn’t produce both 1 gun and 2 butters.
Suppose a nation has a total of 12 units of labor, which can be used to produce either guns or
butter. One gun takes 6 units of labor to produce and 1 butter takes 2 units of labor to
produce.
Evaluate the allocation of resources of this country based on the following points.
• Reason for the scarcity that exists in this economy. Use the data as evidence of your
reasoning.
• Maximum quantity of guns that can be produced.
• Maximum quantity of butter than can be produced.
• Diagram which represents the nation’s
•
• Reason why the nation can’t produce both 3 guns and 4 butters.
• Reason why the nation shouldn’t produce both 1 gun and 2 butters.
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