Assignment #2.rtf - PRODUCTION POSSIBILITIES CURVE PROBLEM...

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PRODUCTION POSSIBILITIES CURVE PROBLEM Hightechland produces two commodities: movies and computers. Hightechland’s resources included workers, factories, electricity and so on. The following schedule indicates some of the points on Hightechland’s production possibilities curve. Commodity A B C D E Movies 100 75 50 25 0 Computers 0 30 55 70 80 A. Does the production exhibit increasing, decreasing or constant per-unit opportunity costs? How do you know? a. Movie production shows an increase in per-unit opportunity costs. The relation shows that as more movies are produced, fewer and fewer computers can be made B. Graph Hightechland’s production possibilities curve, and label it AA. C. Suppose Hightechland is operating at Point C but would like to alter production to Point D. What would be the per-unit opportunity cost of producing more computers? a. As the company alters from Point C to Point D, the per-unit opportunity cost of producing one additional computer is 1 2 / 3 movie.
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This note was uploaded on 10/01/2011 for the course BIOLOGY 1510 taught by Professor --- during the Spring '11 term at Georgia State.

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Assignment #2.rtf - PRODUCTION POSSIBILITIES CURVE PROBLEM...

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