Question

With the following graphs, assume that a farm is producing or attempting to produce at point A and that customers are buying more meat than fish. Match each graph below with the following descriptions. Some descriptions apply to more than one graph, and some graphs have more than one description). a) Inefficient production of meat and fish. b) Productive efficiency. c) Technological advances in the production of meat and fish. d) The law of increasing opportunity cost of fish. e) The law of increasing opportunity cost of meat. f) An impossible combination of meat and fish. 4. On a graph, show how, if at all, each of the following events would affect the production possibilities of a business. a) Standardized examination scores of high school and college students decline b) The unemployment rate falls from 9 to 6 percent of the labor force. c) A devastating earthquake destroys numerous production facilities. d) Defense spending is reduced to allow government to spend more on health care

Answer 1

Answer to first question is provided as per HOMEWORKLIB RULES :

3) a) Inefficient production means that the point A is inside the PPF . Graph ( 2 )

b) Productive efficiency is when A is on the border of PPF : Graph 3 , 4 , 5 , 6 .

c) Technological advances means that the PPF shifts outwards : Graph 5 . ( slope is same )

d) The law of increasing opportunity cost of fish , as we produce more and more fish the opportunity cost rises , more meat has to be forgone . Graph 3 ( A to B )

e) The law of increasing opportunity cost of meat , as we produce more and more meat the opportunity cost rises , more fish has to be forgone . Graph 6 ( B to A )

f) Impossible combination lies outside the boundary of PPF . Graph 1

Graphs Index : 1 , 2 , 3

4 , 5 , 6 .