6. The following is a set of hypothetical produc-tion possibilities for a nation.CombinationABCDAutomobiles(thousands)0268Beef (thousandsof tons)109740a. Plot these production possibilities data.What is the opportunity cost of the first2,000 automobiles produced? Betweenwhich points is the opportunity cost perthousand automobiles highest? Betweenwhich points is the opportunity cost perthousand tons of beef highest?b. Label a point F inside the curve. Why is thisan inefficient point? Label a point G outsidethe curve. Why is this point unattainable?Why are points A through E all efficientpoints?c. Does this production possibilities curvereflect the law of increasing opportunitycosts? Explain.d. What assumptions could be changed toshift the production possibilities curve?

The production possibility curve (PPC) represents the different combinations of two goods or…

Answered: c. Does this production possibilities…

c. Does this production possibilities curve reflect the law of increasing opportunity costs? Explain. d. What assumptions could be changed to shift the production possibilities curve?

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter3: Interdependence And The Gains Rrom Trade

Section: Chapter Questions

Problem 4PA

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Question

6. The following is a set of hypothetical produc-
tion possibilities for a nation.
Combination
A
B
C
D
Automobiles
(thousands)
0
2
6
8
Beef (thousands
of tons)
10
974
0
a. Plot these production possibilities data.
What is the opportunity cost of the first
2,000 automobiles produced? Between
which points is the opportunity cost per
thousand automobiles highest? Between
which points is the opportunity cost per
thousand tons of beef highest?
b. Label a point F inside the curve. Why is this
an inefficient point? Label a point G outside
the curve. Why is this point unattainable?
Why are points A through E all efficient
points?
c. Does this production possibilities curve
reflect the law of increasing opportunity
costs? Explain.
d. What assumptions could be changed to
shift the production possibilities curve?

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Step 1: Define Production possibility curve-

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EX LO d @ Safari File Edit View History Bookmarks Window Help Lily ✓ My Home Courses Rental Options V Catalog and Study Tools Dashboard College Success Tips Help Career Success Tips Give Feedback « 100 CENGAGE MINDTAP PISTACHIOS (Millions of pounds) 48 42 36 Homework (Ch 03) The following graphs show the production possibilities frontiers (PPFS) for Shenandoah and Denali. Both countries produce peas and pistachios, each initially (i.e., before specialization and trade) producing 18 million pounds of peas and 9 million pounds of pistachios, as indicated by the grey stars marked with the letter A. 30 24 18 PPF 12 6 0 0 C Mind Tap - Cengage Learning 6 S Shenandoah A 12 18 24 30 PEAS (Millions of pounds) 36 42 48 ? JAN 28 PISTACHIOS (Millions of pounds) 48 42 36 30 24 6 C MindTap - Cengage Learning 0 ng.cengage.com PPF 6 Denali A 12 18 24 30 36 PEAS (Millions of pounds) 42 48 Shenandoah has a comparative advantage in the production of while Denali has a comparative advantage in the…