Smallville has a linear production possibility frontier in the production of good X and good Y.It can produce six of X per hour or eight of Y per hour.Suppose it has 240 hours of labour and divides labour hours equally between production of good X and good Y.What is the MAXIMUM number of good Y it can produce in the time it has allocated to Y production?
A) 960
B) 30
C) 720
D) 6

Question

Quizplus · Accepted Answer

Smallville allocates 120 hours to the production of good Y (half of 240 hours). Since it can produce 8 units of Y per hour, the maximum number of good Y it can produce is 120 hours * 8 units/hour = 960 units.

Smallville Has a Linear Production Possibility Frontier in the Production