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Production Possibility Curves

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Last updated over 6 years ago
9 questions
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Question 1
1.

Draw a production possibilities curve that shows a constant opportunity cost. Why do these two goods have a constant opportunity cost? (Answer in a text box below the graph). Also show two different allocatively efficient points. Why would a society choose one point over another?

Question 2
2.

Draw a production possibilities curve for two goods that shows an increasing opportunity cost. Why do these goods have an increasing opportunity cost? On your graph include each of the following points: a productively efficient point, an impossible or unattainable combination of production, and a combination that shows unemployment.

For all of the next 3 problems assume that the two goods produced are pizza and robots. Draw a ppc showing changes for the situation that is described.
-New robot making technology
Question 3
3.

-New robot making technology

Question 4
4.

-Decrease in the demand for pizza

Question 5
5.

-Mad cow disease kills 75% of cows

For all of the next 4 problems assume that the two goods produced are consumer goods and capital goods. Draw a ppc showing changes for the situation that is described.
Question 6
6.

-Destruction of oil refineries resulting from a hurricane in the Gulf of Mexico

Question 7
7.

-Faster computer hardware

Question 8
8.

Many workers unemployed

Question 9
9.

Significant increases in education