Economics Homework Help
KSU Microeconomics Production Possibility Frontier Discussion Questions
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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 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.(2 Marks)
- Rational people respond to incentives
- Role of prices in allocating resources
