15 Suppose Australia produces only scooters and bikes. The resources that are used in the production of these two goods are not specialized-that is, the same set of resources is equally effective at producing both bikes and scooters. The shape of Australia's production possibilities frontier (PPF) should reflect the fact that as Australia produces more bikes and fewer scooters, the opportunity cost of producing each additional bike The following graphs show two possible PPFS for Australia's economy: a straight-line PPF (PPF) and a bowed-out PPF (PPF2). SCOOTERS PPF1 BIKES Graph 1 SCOOTERS PPF 2 BIKES Graph 2 Based on the previous description, the trade-off Australia faces between producing bikes and scooters is best represented by DELL FIQ 75 ? 733

Suppose Ireland produces only two goods: barley and tablets. The following graph shows Ireland's current production possibilities frontier, along with six output combinations represented by black points (plus symbols) labeled A to F. Complete the following table by indicating whether each point represents output combinations that are inefficient, efficient, or unattainable. Check all that apply. Point Inefficient Efficient Unattainable A         B         C         D         E         F

Consider two neighboring island countries called Arcadia and Euphoria. They each have 4 million labor hours available per week that they can use to produce rye, jeans, or a combination of both. The following table shows the amount of rye or jeans that can be produced using 1 hour of labor. Country Arcadia Euphoria Rye (Bushels per hour of labor) 8 5 Jeans (Pairs per hour of labor) 16 20 Initially, suppose Arcadia uses 1 million hours of labor per week to produce rye and 3 million hours per week to produce jeans, while Euphoria uses 3 million hours of labor per week to produce rye and 1 million hours per week to produce jeans. Consequently, Arcadia produces 8 million bushels of rye and 48 million pairs of jeans, and Euphoria produces 15 million bushels of rye and 20 million pairs of jeans. Assume there are no other countries willing to trade goods, so in the absence of trade between these two countries, each country consumes the amount of rye and jeans it produces. of jeans, and…

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