Question

How should one interpret the following daily production possibility curve :6A+B=60?

a. in 1 hour the producer is able to produce1/6 of a unit of A

b. In 1 hour the producer is able to produce 10 units of A

c.The production ofB is 6times more expensive than production ofA

d.none of rights

e.In1 hour the producer is able to produce 6 Unit of A

Answer 1

The correct answer is: a).

Reason: consider B = 0.

Then, 6A = 60 and thus A* = 10.

Thus, in 60 hours, 10 units of A can be produced.

And, in 1 hour, 10/60 = 1/6 units of A can be produced.

Thanks!