Question

1.Draw a production possibilities curve for a country that produces just rice and walnuts. Assume that resources used to make rice are perfectly adaptable to making walnuts. Show what would happen if there was a decrease in the working age population.

2. Draw a production possibilities curve for a county that produces just cars and corn. Show what would happen if there was a significant increase in the productivity of workers in this country.

3. Draw a PPC for a country that produces just shoes and cell phones. Place a point “A” showing a level of production that would occur if the economy is suffering from a recession. Using a point “B” show what would happen if there were decreases in taxes and increases in government spending to end the recession.

4. Draw a production possibilities curve for a country that produces just rulers and newspapers. Show what would happen if new printing presses make it possible to increase the production of newspaper only.

5. Draw a PPC for a country that produces capital goods and consumer goods. Place a point “A” at a level of production where the economy is producing an equal amount of consumer and capital goods. Using a point “B” show a possible level of production that would increase this country’s growth rate.

Answer 1

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1) this would be a straight line drawn with a movement upward

2) bowed out curve with a movement downward

3) Point A would be drawn inside the curve and point B would be drawn outside the curve

4) A movement downwards towards newspapers

5) Point A is on the curve and point B is outside the curve

Step-by-step explanation:

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