help

ES2560: Week 2 Production Possibilities Curve

Page 1

The production of any goods or services requires the allocation of resources that otherwise

could be used to produce other goods and services, given the available technology. Additional

units can be provided only by incurring an opportunity cost.

Tasks:

The production possibilities table given below illustrates the choices of country A in producing

guns and butter, assuming efficient resource allocation. Using the data provided in the table,

complete the following tasks:

Plot the country’s production possibilities curve.

Calculate the opportunity cost of producing guns and butter at each point in the

production possibilities curve.

Does the Production Possibilities Curve (PPC) illustrate increasing, constant, or

decreasing opportunity cost? Why?

Guns Butter

25 0

24 6

22 11

18 15

13 18

7 20

0 21

Submission Requirements:

Submit the analysis in approximately two pages for grading before the end of the week.

Format: Microsoft Word

Font: Arial, 12-point, double-spaced

ES2560: Week 2 Production Possibilities Curve

Page 2

Evaluation Criteria:

Criteria Points Assigned Points Earned

Did you answer all parts of the question properly? 85

Did you use appropriate grammar and spelling, and cited

references, where applicable?

15