Assessment Question Week 2: Production Possibility Frontier In 2017, Nepal production of rice and machinery in...

Assessment Question Week 2: Production Possibility Frontier
In 2017, Nepal production of rice and machinery in 2017 was published by the Nepal Bureau of Statistics as indicated by the table below.
Production in Nepal
   P   Q   R   S   T   U   V   W   X   Y   Z
Rice (1000 tons)   0   10   26   37   45   50   55   59   66   77   80
Machinery (units)   90   89   85   80   75   70   65   60   50   30   0

Based on the table above, a production possibility frontier for Nepal can be plotted as below:

Use the Nepal production table and production possibility frontier to answer the following questions.
(a)   Name positions B, V and D. Explain the implications of each of the production positions (B, V, D) on Nepal’s economy.
(b)   Supposing Nepal is operating at level T what is the opportunity cost of producing 10,000 more tons of rice? Also, suppose Nepal is operating at X what is the opportunity cost of producing 70 units of machinery?

(c)   Use the graph below to answer the questions that follow

(i)   Suppose Nepal begins to manufacture fertilizers, explain the impact of the discovery of fertilizers to Nepal’s economy using PPF.
(ii)   Supposing there is a discovery of steel in Nepal, explain the impact of steel to the economy of Nepal using a PPF.
(iii)   The Minister of Finance in Nepal advices that in order to increase rice production and machinery, each sector requires USD 50 billion. Explain the impact of the budgetary allocation on the economy of Nepal using PPF.

Expert Solution

Rahul Sunny answered 8 months ago

Consider a country's production possibility frontier with machinery (capital goods) on one axis and consumer goods...

Consider a country's production possibility frontier with machinery (capital goods) on one axis and consumer goods on the other axis. Tell me a story about how the rate at which the PPF shifts outward over time might be related to the current position on the PPF. Also relate that choice (about the current position on the PPF) to choices about savings and consumption.

Graphically derive and interpret a PRODUCTION POSSIBILITY FRONTIER

Graphically derive and interpret a PRODUCTION POSSIBILITY FRONTIER. NOTE: remember to list and interpret the assumptions upon which the derivation process is based.

What is a production possibility frontier in terms of economics?

QUESTION ONE [30] 1.1 Explain the purpose of the production possibility frontier as a basic economic...

QUESTION ONE [30] 1.1 Explain the purpose of the production possibility frontier as a basic economic model. Use a diagram to motivate your answer. (15) 1.2 Describe how the production possibility frontier can be used to illustrate economic growth. (15)

2. Draw an increasing opportunity cost Production Possibility Frontier and mark 1. The point that shows...

2. Draw an increasing opportunity cost Production Possibility Frontier and mark 1. The point that shows inefficient production 2. Efficient Production 3. Point of production that cannot be achieved. 3. In the following questions, draw the graph and answer in words. (5 points each) a) Draw a demand curve for pizza and show what happens when price of pizza falls. b) Assuming pizza to be a normal good, show what happens when income increases. c) If beer is a complementary...

ECONOMICS QUESTION ONE [25] “The production possibility frontier measures the efficiency in which two commodities can...

ECONOMICS QUESTION ONE [25] “The production possibility frontier measures the efficiency in which two commodities can be produced together, helping managers and leaders to decide what mix of commodities is most beneficial.” In terms of the above statement, apply the basic economic model of the production possibility frontier, (PPF), to your country or a country of your choice, indicating how it illustrates the fundamental economic problem of scarcity, choice and opportunity cost. Include in your answer a discussion of the...

QUESTION ONE [30] 1.1 “The production possibility frontier (PPF) for two goods represents all possible combinations...

QUESTION ONE [30] 1.1 “The production possibility frontier (PPF) for two goods represents all possible combinations of goals when resources are fully utilised, for an economy at a specific point in time. However, if an economy grows then the PPF can shift outwards”. In terms of the above statement, discuss how economic growth can be illustrated using the model of the PPF. Include in your answer the factors that contribute to economic growth. (20) 1.2 The production possibility frontier (PPF)...

In the specific factor model: a) Explain the shape of the Production Possibility Frontier. b) What...

In the specific factor model: a) Explain the shape of the Production Possibility Frontier. b) What is the equilibrium condition for labour allocation between sectors? c) Explain at what point on the PPF the county will produce? d) Assume the price of one good is increasing. Explain what happens with labour and wage rate in each sector.

(C) Analyze the difference between a straight line and a curved production possibility frontier.

1.1 With the aid of a full y labelled diagram, draw a Production Possibility Frontier for...

1.1 With the aid of a full y labelled diagram, draw a Production Possibility Frontier for an economy producing maize and fish. Use the diagram to explain the concepts of choice, scarcity and opportunity costs 1.2 With the aid of a separate diagram explain what would happen if the African armyworm destroyed the maize production in the economy of 1.1 ceteris paribus 1.3 With reference to the diagram in 1.1, distinguish between 'efficiency' and' inefficiency'

Question