Question

Question 2

Imagine you are a researcher with a pharmaceutical company who has just discovered a new drug that may potentially
cure Ebola. Compose a three-paragraph memo to the chief executive officer of the company that addresses these aspects
of the situation:
1. Summarize the situation in West Africa, including the impact on the economies of the affected countries and the
resources that are scarce.
2. Discuss the resources you have used to discover the drug or will need to continue producing it. (Take an educated
guess at what you will need for this part, just be sure to classify your needs into the proper factor of production.)
3. Discuss the opportunity cost to the company in devoting more resources to the production and distribution of the
new drug.
4. Applying your knowledge of the factors of production and PPCs, explain the impact that your drug could have on the
economies of countries in West Africa affected by the Ebola virus.

Answer 1

The Ebola epidemic is still ravaging West Africa, and the death toll has passed 10,000. The labor force and human capital of the economies of the countries affected by Ebola are declining with the increasing number of deaths and people infected with Ebola. The reduction in labor resources caused by the many deaths and the underutilization of human capital caused by the large number of sick people is leading to a decline in output

I have invented an antiviral drug that will cure this deadly disease. The drug is made from a batch of antiviral culture along with minute concentrations of potassium chloride. To produce this drug on large scale, we will need certain capital—sodium chloride, lab equipment, syringes, and oxygen devices to help with breathing. Moreover, we will also need labor in large numbers to act as support and nursing staff who will distribute and administer the drug. The capital needed for this drug is currently used for producing and distributing an antiviral drug for influenza. Considering the urgent need we are facing, I believe that the antiviral drug for the deadly disease Ebola is the need of the hour, and the firm therefore should transfer its resources from producing the flu drug to producing the Ebola antiviral drug. The firm will face a trade-off here, which will lead to a decrease in the production of the flu drug. However, this new drug will certainly improve the condition of those affected by Ebola.

Within a few years, I am sure that the countries that suffered the epidemic will recover their labor. We can soon expect an increase in their production possibilities and a right shift in their PPCs.

Step-by-step explanation:

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