Answer
The correct answer is (b) (2 mittens , 6 hats)
They produces mittens and hats at a constant rate, Hence Production possibility frontier of Max is a straight line.
If it uses 36 hours on Mittens then it can produce 18 mittens and 0 hats If uses 36 hours on Hats then it can produce 6 hats and 0 mittens.
Hence we have two coordinated (M , H) = (18 , 0) and (0,6)
Hence using straight line equation we have:
H = ((6 - 0)/(0 - 18))(M - 18)
=> M + 3H = 18
Option (a) (6 mittens , 4 hats)
6 + 4*3 = 18 = 18 So, it is on Production possibility frontier
Option (b) (2 mittens , 6 hats)
2 + 6*3 = 20 > 18 So, it is outside the Production possibility frontier and so it is not on Production possibility frontier.
Option (c) (18 mittens , 0 hats)
18 + 0*3 = 18 = 18 So, it is on Production possibility frontier.
Option (d) (12 mittens , 2 hats)
12 + 2*3 = 18 = 18 So, it is on Production possibility frontier.
Hence, the correct answer is (b) (2 mittens , 6 hats)
Table 3-11 Assume that Max and Min can switch between producing mittens and producing hats at...
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