Question

uppose that Katniss and Peeta have been exiled on a deserted island. To feed themselves, they need to catch fish and hunt rabbits.The table be hows the production potential of Katniss and Peeta.If Katniss spends all her timefishing,she can catch 40 fish Ifshe spends all her time hunting abbits, she can catch 10rabbits. Peeta can spend all istime on fish and catch 8 fish or all his time on rabits and catch 16 rabbits, Both Katnis and Peeta face a constant trade-off between catching fish and hunting rabbits. Weekly Catch Fish 40 Rabbits 10 16 Katniss Peeta

Answer 1

The production possibility frontier is the locus of all such combination of goods and services produced by an economy that can be produced using all the economic resources efficiently. Therefore, each point on the PPF represents the efficient use of resources. All the point inside PPF denotes inefficient use of resources. All the points beyond PPF are unattainable by the productive capacity of the economy.

Therefore, point A, B, C, and D represents the efficient use of resources. Point F represents an inefficient use of resources and point E is unattainable by productive capacity. Therefore, the correct options are

• Point A: Efficient use of the resource
• Point B: Efficient use of the resource
• Point C: Efficient use of the resource
• Point D: Efficient use of the resource
• Point E: Unattainable
• Point F: Inefficient use of the resource