Business, 12.03.2021 21:50 shoafmckenzie5263

Question 4) Suppose that Australia can only produce two products: cars and wheat. The following table shows the different amounts of outputs Australia can produce. (All numbers below are simplified to make calculations easier). Cars Wheat
(in tonnes)
1,000 0
500 200
400 240
0 400

a. Draw the Production Possibility Frontier (PPF) for the economy of Australia
b. Based on data from the above table, what is the opportunity cost of producing one car in Australia? What is the opportunity cost of producing one tonne of wheat?
c. Suppose that there has been a technological breakthrough in the car industry in Australia. A maximum of 1,500 cars can be now produced. Meanwhile, things remain the same for wheat production. Draw the new PPF (after the advancement in technology). Compare between the new PPF and the original PPF.
d. In the real world, a typical PPF is usually not a straight line but a concave (bowed out) curve. Use the concept of increasing marginal opportunity cost to explain why PPFs are usually concave curves

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Question 4) Suppose that Australia can only produce two products: cars and wheat. The following tabl...