SEU Bill Can Produce Either Tables or Chairs Question

Question Description

I’m stuck on a Economics question and need an explanation.

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:                 
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 Bill’s 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.

Rational people respond to incentives
Role of prices in allocating resources

Tags:
production possibilities frontier

opportunity cost of producing

prices in allocating resources

His production
possibilities

tables on the Horizontal axis
and chairs

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