KSU Microeconomics Production Possibility Frontier Discussion Questions
Description
Question-1 Bill can produce either tables or chairs. Bill can work up to 10 hours a day. His production possibilities are given in the table below:(3 Marks) Tables Chairs 0 200 50 180 60 160 70 140 80 120 90 0 Explain production possibilities frontier (PPF) by putting tables on the Horizontal axis and chairs on the vertical axis. What is Bills opportunity cost of producing one additional table? Currently Bill is producing 70 tables and 120 chairs. Is this allocation of resources efficient? Why?Show this allocation on the graph and advise Bill how he can be more efficient. Question-2 Explain by applying these concepts with examples.(2 Marks) Rational people respond to incentivesRole of prices in allocating resources
Explanation & Answer:
300 Words
Tags:
Horizontal axis
production possibility frontier
vertical axis
cost of producing
Possible Production Frontier
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