Chapter 9, Problem 1P

(a)

To determine

Points that correspond to maximum feasible 2018 production that is more likely to be associated with the curve denoted 2019_A

Introduction:

Production Possibility Curve: It is the curve that represents the combination of two goods or services which can be produced with available resources and technology. The points on PPC are optimal points, while a point inside PPC shows inefficiency in production. The PPC can shift rightward which means the resources have increased or technology has become advanced, as a result the production has increased. Whereas, if it shifts leftward, it means resources has decreased or technology has become obsolete.

(b)

To determine

Points that correspond to maximum feasible 2018 production that is more likely to be associated with the curve denoted 2019_B

Introduction:

Production Possibility Curve: It is the curve that represents the combination of two goods or services which can be produced with available resources and technology. The points on PPC are optimal points, while a point inside PPC shows inefficiency in production. The PPC can shift rightward which means the resources have increased or technology has become advanced, as a result the production has increased. Whereas, if it shifts leftward, it means resources has decreased or technology has become obsolete.