Draw and explain a production possibilities frontier for an economy that produces milk and flowers. What happens to this frontier if a disease kills half of the economy’s cow
Q1. Draw and explain a production possibilities frontier for an economy that produces milk and flowers. What happens to this frontier if a disease kills half of the economy’s cow?
Q2. Imagine a society that produces “guns” (military goods) and “butter” (consumer goods).
(1) Please draw a
(2) Suppose that the society has two political parties, called the Hawks (who want a strong military and the Doves (who want a smaller military). Show a point on your PPF that the Hawks might choose and a point that the Doves might choose.
Q3. An economy consists of three workers: Ronaldo, Messi, and Sonny. Each works 10 hours a day and can produce two services: mowing lawns and washing cars. In an hour, Ronaldo can either mow one lawn or wash one car; Messi can either mow one lawn or wash two cars; Sonny can either mow two lawns or wash one car.
(1) Calculate how much of each service is produced under the following circumstances, which we label A,B,C, and D:
- All three spend all their time mowing lawns (A)
- All three spend all their time washing cars (B)
- All three spend half of their time on each activity (C)
- Ronaldospends half his time on each activity, while Messi only washes cars and Sonny only mows the lawns (D)
(2) Graph the production possibilities frontier (PPF) for this economy. Using your answers to part (1), identify points A,B,C, and D on your graph.
(3) Explain why the production possibilities frontier has the shape it does.
(4) Are any of the allocations calculated in part (1) inefficient? Explain.
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