ECON 2306 9 Trade

ECON 2306 9 Trade

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Unformatted text preview: economy can produce. 9 Production on Island Now let’s consider what would happen if one by one, the rest of the crew moved into radio production from hut production Remember, the people who are best at making radios and not very good at making huts relatively should move out of hut production and into radio production first. Let’s see the production possibilities.. 10 10 Production on the Island Number Producing Huts Produced Huts 7 60 Number Producing Radios Produced Radios 0 0 6 50 1 3 5 41 2 6 4 32 3 9 3 23 4 12 2 15 5 15 1 7 6 18 0 0 7 20 11 11 Production on the Island The Production Possibilities Table can be represented graphically … – To do this we plot each production possibility from the previous table possibility. – The quantity of each good is measured on the X and Y axis. 12 12 Production on the Island Huts 60 When we connect the points, we have a Production Possibilities Frontier/Curve. 50 Notice the inverse relationship! 41 This relationship is mostly linear for ease of numbers, this is not a...
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This note was uploaded on 03/23/2014 for the course ECON 2306 taught by Professor Bailiff during the Spring '08 term at UT Arlington.

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