Question

ROBINSON CRUSOE ACTIVITY

Robinson Crusoe lives alone on an island.

He has some resources at his disposal:

• LAND: Some of the land is rocky and better suited for raising sheep. Other parts of the land are better suited for growing wheat.
• SHEEP
• Up to 10 Hours a day of light for working

Robinson produces cloth (from his sheep) and he grows wheat to produce bread. If Robinson uses all 10 of his work hours he has the following possibilities:

Possibility	Bread (Loaves per month)	Cloth (Yards per month)
A	20	0
B	18	1
C	15	2
D	11	3
E	6	4
F	0	5

1. Graphically depict Robinson’s production possibility frontier (PPF). Put bread on the vertical axis and cloth on the horizontal axis.

2. Find one point on the graph that is unattainable given Robinson’s resources and technology and label it X.

3. Find one point on the graph that is attainable given Robinson’s resources and technology, but is inefficient in the sense that it does not fully utilize all resources. Label this point Y.

4. Find one point on the graph that is attainable given Robinson’s resources and technology, and is also efficient in the sense that it does fully utilize all resources. Label this point Z.

Possibility	Bread (Loaves per month)	Cloth (Yards per month)
A	20	0
B	18	1
C	15	2
D	11	3
E	6	4
F	0	5

5. What is the opportunity cost of moving from the production of 0 to 1 yards of cloth? ______________

What is the opportunity cost of moving from the production of 1 to 2 yards of cloth? ______________

What is the opportunity cost of moving from the production of 2 to 3 yards of cloth? ______________

What is the opportunity cost of moving from the production of 3 to 4 yards of cloth? ______________

What is the opportunity cost of moving from the production of 4 to 5 yards of cloth? ______________

6. What is the opportunity cost of moving from production of 0 to 6 loaves of bread? ________________

Within the 0 to 6 range for bread production, what is the opportunity cost of producing one loaf of bread?   

(Assume constant opportunity costs of production within this range) _______________

7. Would you say that the opportunity costs depicted in this PPF are constant or increasing?   Explain.

Answer 1

A) The above table is represented in the form of PPF in the following diagram below. All the possible combinations are marked as per the table.

B) X shows the combination which is unattainable by Robinson as it lies outside the PPF. The combination is unattainable because it requires more resources and technology to produce this particular combination but he has resources and technology which is defined by the PPF. So, any combination outside the PPF is unattainable.

C) Y point lies inside the PPF and shows that combination which attainable but not efficient. Robinson can produce Y combination with the available resources but since this point does not lie on the PPf, it does not show efficient utilization of resources.

D) Z is the point which is both efficient and attainable because it lies on the PPF which shows the efficient utilization of resources and since it lies on PPF, Robinson can produce this combination with available resources and technology.