want to increase its production of capital goods? 10. Use the graph below, conta
ID: 1117560 • Letter: W
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want to increase its production of capital goods? 10. Use the graph below, containing a PPC for the small, isolated country of Bucknellica, to answer the following questions a. What is the opportunity cost of moving from point B to point C? b. What is the opportunity cost of moving from point C to point B? c. What factors could cause the Bucknellican economy to be able to achieve point F? d. What are some factors that might cause the Bucknellican economy to operate at Ck 2 point E? e. Compute the opportunity cost of one unit of computers for each region of the PPC A-B, B-C and C-D). (Hint: In the region from A-B, 4 units of computers are equal in terms of resource use to 10 units of beer, so 1 unit of computers is equal to 10/4 or 2.5 units of beer.) Why does the opportunity cost of a unit of computers change as we move from A to D? Explain. f. In terms of economic growth, is there a reason to prefer point D over point A? Explain. Beer PPC for Bucknellica 70 50 6 8 ComputersExplanation / Answer
(10)
(a)
Production possibility curve can be defined as the different combination of two goods which can be produced by using all available resources efficiently.
The opportunity cost of moving from point B to point C is
= total increased production of computer/total decreased the production of beer.
=(6-4)/ (70-50)
=2/20
=0.1 unit of beer.
(b)
The opportunity cost of moving from point C to point B is
= total increased production of beer/total decreased the production of the computer.
=(70-50)/(6-4)
=20/2
=10 computer.
(c)
Any point outside the PPF shows economic growth. This can be achieved either increased in the resources or with the advancement of technology.
(d)
Any point inside the PPF showed the underutilization of resources.
Therefore for producing at point E, there is need to underutilize the resources.
If people start underutilizing the resources then economy can operate at point E
# according to chegg guidelines i have solved first four part.
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