Problem A Type of Production Production Alternative A Production Alternative B P
ID: 1221588 • Letter: P
Question
Problem A
Type of Production
Production Alternative A
Production Alternative B
Production Alternative C
Production Alternative D
Production Alternative E
Production Alternative F
Production Alternative G
Butter
0
1
2
3
4
5
6
Guns
14
13
11
9
7
4
0
3. Suppose this hypothetical economy were producing only 1 item of butter and 10 guns, and this was depicted by this production possibilities table and curve. What conclusions could you draw about this economy's resource utilization?
Course is Global Economics 6008
Type of Production
Production Alternative A
Production Alternative B
Production Alternative C
Production Alternative D
Production Alternative E
Production Alternative F
Production Alternative G
Butter
0
1
2
3
4
5
6
Guns
14
13
11
9
7
4
0
Explanation / Answer
It can be concluded that the economy is underutilizing its resources.
The production possibilities table shows that when producing 1 unit of butter, the country can produce a maximum of 13 units of guns (alternative B). But here, with 1 unit of butter, only 10 guns are produced, so resources are underutilized. The bundle lies inside the PPF.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.