Question

able Production Possibilities Schedule I) Use Table: Production Possibilities Schedule I. The opportunity cost of producing the third unit of consumer goods is units of capital goods. Table: Production Possibilities Schedule I Alternatives Consumer goods per period 0 Capital goods per period 30 28 24 1810 8 2 (Figure: Comparative Advantage) Use Figure: Comparative Advantage. Westland has a comparative advantage in producing: Figure: Comparative Advantage Eastland and Westland produce only two goods, boxes of peaches and boxes of oranges, and this figure shows each nation's production possibility frontier for the two goods. Eastland Westland Oranges Oranges 100 50 0 20 40 60 80 100120 140160180 200 0 20 40 60 80 100120 140160180 200 Peaches Peaches neither oranges nor peaches both oranges and peaches. peaches only oranges only 12. (Figure: Production Possibility Frontier) Use Figure: Production Possibilities Frontier. This production possibility frontier is: Figure: Production Possibility Frontier Cars (per period) 18 16 12 Production ssibility frontier 8 12 16 18 20 Computens (per period) bowed out because of increasing opportunity costs. bowed out because of constant cost of cars and computers. bowed in because of increasing opportunity costs. linear because of constant costs.

Answer 1

a) "B" it is 6 units of capital goods.

b) "C" Westland has a comparative advantage in the production of Peaches.

c) "A" bowed out because of increasing opportunity costs.