2. The production possibilities curve for the nation of Fantasia for the two goods, TVs and business machines, for 2007

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2 The Production Possibilities Curve For The Nation Of Fantasia For The Two Goods Tvs And Business Machines For 2007 1 (34.72 KiB) Viewed 58 times

2. The production possibilities curve for the nation of Fantasia for the two goods, TVs and business machines, for 2007 is described in the accompanying graph. 89 5 TVs (thousands per year) 65 19 DO 1 Machines (thousands per year) a. If Fantasia produces 2000 machines in 2007, what is the maximum number of TVs that can be pro- duced in 2007? h. What factors prevent Fantasia from producing the combination at point in 2007? c. If Fantasia completely specializes in the production of TVs in 2007, what maximum number of TVs could it produce per year? d. e. If Fantasia is at point G in 2007, this situation could conflict with what two socioeconomic goals? What is the opportunity cost of producing an addi- tional machine when moving from: (i) point A to point B2 (i) point D to point E f. What economic law is illustrated by your answers to part (e) above? g. Which of the points A, B, C, D, E, F, G, and Hare productively efficient? h. If society values the production combination at point D the most, but Fantasia is currently produc- ing at point C, this situation conflicts with what socioeconomic goal? i. Which one of the two points Bor Ewould lead to a greater rate of economic growth? Why? What important trade-off is illustrated here? j. How will economic growth affect Fantasia's pro- duction possibilities curve over time?