The figure to the right ustrates the trade-offs facing Ford Motor Company. The l

Question

The figure to the right ustrates the trade-offs facing Ford Motor Company. The line in the graph is Ford's production possinilities frontie If Ford uses all ts resources to produce trucks, how many can it produce? 9.0 thousand trucks per day. Enter a nuneric response using a real number rounded to one decimal place.) Suppose Ford is currently building 3 thousand cars per day. To build an additional 1 thousand cars, how many fewer trucks can be built?thousand fewer trucks per day. PPF 0 1 2 3 4 5 8 7 8 9 10 11 12 13 14 Quantily of cars (1,000s per day

Explanation / Answer

The given production possibilities frontier shows that using all its resources in production of cars, Ford can produce a maximum of 6,000 cars per day.

On the other hand, using all its resources in the production of trucks, Ford can produce a maximum of 9,000 trucks.

Thus,

If Ford uses all its resources to produce trucks, it can produce 9 thousand trucks per day.

When Ford produce 3 thousand cars per day, it can produce 7 thousand trucks per day as well.

If Ford produces 4 thousand cars per day, it can produce 6 thousand trucks per day.

So, in order to produce 1,000 additional cars, production of trucks has to be reduced by 1,000 trucks as well.

So,

Suppose Ford is currently building 3 thousand cars per day. To build an additional 1 thousand cars, Ford can built 1 thousand fewer trucks per day.

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