Figure 2-6
-Refer to Figure 2-6.If this economy devotes all of its resources to the production of bathtubs,then it will produce

Question

Figure 2-6 
-Refer to Figure 2-6.If this economy devotes all of its resources to the production of bathtubs,then it will produce

Quizplus · Accepted Answer

This economy's production possibilities frontier (PPF) shows the maximum combinations of two goods (bathtubs and barrels) that can be produced with the given resources and technology. The PPF is downward-sloping, which means that producing more bathtubs requires sacrificing some barrels (and vice versa).
 
Since this economy has only one PPF, it means that it has a fixed amount of resources and technology that can produce either bathtubs or barrels. Therefore, if it devotes all of its resources to the production of bathtubs, it can produce up to the point on the PPF where the entire resources are used for bathtub production, which is at point A (16 bathtubs and 0 barrels). Any point inside the PPF is inefficient and any point outside the PPF is impossible to reach with the given resources and technology. Therefore, the best choice for this economy, if it wants to maximize bathtub production, is point A.

Figure 2-6 -Refer to Figure 2-6.If This Economy Devotes All of Its