Suppose that country A produces two goods (C and T) under conditions of constant

Question

Suppose that country A produces two goods (C and T) under conditions of constant opportunity costs. Given its resources, the maximum C that it can make is 1200 units, and the opportunity cost of making one additional T is 4 units of C.
Reminder: In order to get full credit: you must show ALL calculations!!!
a. What is the maximum amount of T that it can produce?
b. Draw a graph of the PPF using the information above. On your graph, place T on the vertical axis and C on the horizontal axis. Be sure to label the axes, the numerical intercepts and the PPF.
c. What is the value of the slope?
i. What does this slope value represent?

Explanation / Answer

a. C=4t is the equation to use to find the maximum. If C=1200 units which is the max that it can produce, then you plug that into the equation so 1200 units= 4t. Divide 1200 units by 4 and you find out that t=300 units at its maximum production. *I hope this helps, I don't have the tools on my computer to make a graph

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