Question

Below table shows the production possibilities for the country of Emilon: Rice Beef Complete the following (approximate) possibilities for Emilon. a. Emilon can produce 52 rice and 2 beef. b. Emilon can produce 10 rice and 8 beef. Which of the following product combinations is Emilon capable of producing? c. Can Emilon produce 40 rice and 8 beef? No, it cannot be produced. d. Can Emilon produce 28 rice and 7 beef? Yes, it can be produced.

Answer 1

(a) Emilon can produce 52 rice and 2 beef because as we can see point D represents 48 rice and 4 beef and Point E represents 56 rice and 0 beef. This implies if rice production increases by 8 ,then beef production would decreases by 4. So, when Emilon can produce 52 rice ,that is rice production increases by 4 ,then beef production would decrease by 4/2 = 2 .This would lie on the PPF.

(b) Emilon can produce 28 rice and 8 beef because Point B represents 20 rice and 9 beef and Point C represents 36 rice and 7 beef , so if beef production decreases by 2 ,then rice production increases by (36-20)= 16 . And if beef production decreases by 1 , then rice production increases by 16/2 = 8 . This would lie on the PPF.

(c) No, Emilon cannot produce 40 rice and 8 beef because it would not lie on the PPF , it lies outside the PPF ,where both rice and beef production is more.

(d) Yes, Emilon can produce 28 rice and 7 beef , but it lies inside the PPF because efficient amount of production is 28 rice and 8 beef.