Change in preference and production possibility frontier .

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Chapter 2, Problem 4CQQ

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Change in preference and production possibility frontier.

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Draw and explain a production possibilities frontier for an economy that produces cheese and milk. What happens to this frontier if a disease kills half of the economy’s cows? Use a production possibilities frontier to describe the idea of “efficiency.” kindly solve both parts.

Drawing a production possibilities frontier (PPF) Instructions: Consider an economy than only produces two goods - Blueberries and Batteries. Step 1: Draw a production possibilities frontier (PPF) for this economy. Label blueberries on the vertical axis and batteries on the horizontal axis. Label one point that is "efficient", one point that is "inefficient", and one point that is "unattainable". Step 2. Draw another PPF of the economy with the axes labeled. Grab another color pen/pencil/highlighter and show how the PPF would change if there was a technological change that increased the production of batteries only. (Hint: The intercept for blueberries will not change.) Clearly label the new PPF. Step 3. Draw another PPF of the economy with the axes labeled. Grab another color pen/pencil/highlighter and show how the PPF would change if there was a drought that destroyed some of the blueberry harvest. (Hint: The intercept for batteries will not change.) Clearly label the new…

Which of the following is the most accurate statement about production possibilities? Question 10Answer a. An economy can produce at any point inside the production possibilities frontier, but not on or outside the frontier. b. An economy can produce at any point on or inside the production possibilities frontier, but not outside the frontier c. An economy can produce at any point inside or outside a production possibilities frontier. d. An economy can produce only on the production possibilities frontier.