Suppose that a simple society has an economy with only one resource, labor. Labo

Question

Suppose that a simple society has an economy with only one resource, labor. Labor can be used to produce only two commodities-X, a necessity good (food) and Y, a luxury good (music and merriment). Suppose that the labor force consists of 100 workers. One laborer can produce either 5 units of necessity per month (by hunting and gathering) or 10 units of luxury per month (by writing songs, playing the guitar, dancing, and so on) PPF 1,20 1,100 1,000 900 800 Using the line drawing tool, draw this economy's duction Possibilities tier (Be sure that the PPF intersects both the Y-axis and the X-axis.) Carefully follow the instructions above and only draw the required object. What is the meaning of the X- and Y-intercepts? 0 A. These points show the preferred amount of goods X and Y that a society O B. These are the limits of production if all resources are used to produce only ° C. These are the limits of production if all resources are used to produce 500 400 300 200 100 PPF will produce one good both goods 0 100 200 300 400 500 600 700 800 900 1,000 Necessity (X) D. These points demonstrate an inefficient use of resources

Explanation / Answer

Answer:- what is the meaning of x and y-intercepts

Correct Answer;- B;- These are the limits of production of all resources are used to produce only one good

Reason:- The inerseption of PPF curve on the X and Y axis indicates the maximum quantities which can be produced when all the inpts are devoted to the production of that product only.

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