Economics Homework Help

KSU Microeconomics Production Possibility Frontier Discussion Questions

Get Your Custom Essay Written From Scratch
We have worked on a similar problem. If you need help click order now button and submit your assignment instructions.
Just from $13/Page
Order Now

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