MICROECON-2

Econ 201 - NelsonUnit 2 Assignment Name____________________________ A . The country of Nelsonia produces tanks and trucks . The table below shows five of the possible choices for Nelsonia . Tank production is measured in thousands per year and truck production is measured in millions per year . 1 . On the grid to the right , plot the production possibilities frontier (PPF ) for Nelsonia Shown in Graph 2 . Pick any point inside the curve and label it M . What does point M represent This represents the point where the country is producing 24 ,000 trucks and

4 million tanks . At this production level , the country is not fully utilizing its resources

a . If the people of Nelsonia are currently choosing point M what is the opportunity cost of another truck ? Explain At this point , the opportunity cost of another truck is zero since the country is operating under its capacity and has spare resources . It can thus produce another truck without foregoing production of any tanks . 3 . Pick any point outside the curve and label it N . What does this point represent This point represents a production combination in which the country is producing 40 ,000 tanks and 6 million trucks . This point is beyond the Production Possibility Frontier so it is not possible for the country to produce at this point

4 . Pick any point on the curve and label it X . What does this point represent This point represents a production level at which the country is fully utilizing its resources and has no...