6a). What point(s) would represent a combination of DVD Players and MP3 Players
ID: 1188032 • Letter: 6
Question
6a). What point(s) would represent a combination of DVD Players and MP3 Players that cannot be produced given the production possibilities frontier shown in the above diagram? Explain your answer.
6b). What point(s) represent a combination of DVD Players and MP3 Players that might be produced if the economy represented by the production possibilities frontier in the above diagram were experiencing unemployment? Explain your answer.
6c). What factors determine the rate of long-run economic growth?
Explanation / Answer
6 a : Point E is not possible. Because at point A all resources are being used up to 80 Million mp3 players and 80 million DVD players. Point E corresponds to same number of DVD players but more mp3 players which is not possible as there are no extra resources available which could be used to produce the extra MP3 players.
6 b : D represents the case of underemployment because keeping the number of either of DVD players or of MP3 player fixed we can use unsed resources to produce more units of the other.
6 c : Factors governing long run economic growth
- increase in quantity and quality of factors of production
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