The following table contains some production possibilities for an economy for a given month.

If the production possibilities frontier is a straight line,then "?" must be
A) 50.
B) 75.
C) 100.
D) 125.

Question

The following table contains some production possibilities for an economy for a given month.

If the production possibilities frontier is a straight line,then "?" must be
A) 50. 
B) 75. 
C) 100. 
D) 125.

Quizplus · Accepted Answer

The production possibilities frontier (PPF) represents the maximum combination of goods that can be produced using available resources and technology. If the PPF is a straight line, it means that the opportunity cost of producing one unit of one good is constant and does not depend on the amount of the other good produced. In this case, we can see that the PPF has a slope of -2, which means that for every unit of food produced, 2 units of clothing must be given up. Therefore, the economy can produce either 50 units of food and 25 units of clothing or 100 units of food and 0 units of clothing. The maximum production point on the PPF is where all available resources are used and there is no waste. This point is located at the intersection of the PPF with the two axes, where the economy produces 100 units of food and 0 units of clothing. Therefore, the best choice is C) 100.

The Following Table Contains Some Production Possibilities for an Economy