Figure 2.6

Figure 2.6 above shows the production possibility frontier for Vidalia, a nation that produces two goods, roses and orchids.
-Refer to Figure 2.6. Suppose Vidalia is currently producing 120 dozen roses per period. How many orchids is it also producing, assuming that resources are fully utilised?

Question

Figure 2.6
  
Figure 2.6 above shows the production possibility frontier for Vidalia, a nation that produces two goods, roses and orchids.
-Refer to Figure 2.6. Suppose Vidalia is currently producing 120 dozen roses per period. How many orchids is it also producing, assuming that resources are fully utilised?

Quizplus · Accepted Answer

If Vidalia is currently producing 120 dozen roses per period and resources are fully utilized, it is at point A on the production possibility frontier. From point A, the maximum possible production of orchids is at point B, which corresponds to 32 dozen orchids. Therefore, the answer is B.

Figure 2.6 Figure 2.6 Above Shows the Production Possibility Frontier for Vidalia