Production Possibilities Calculation Paper
Instructions
- Avoid plagiarism, the work should be in your own words.
- All answered must be typed using Times New Roman (size 12, double-spaced) font.
- also I would like to clarify that you using the APA style reference.
Question- 1
Zaid can produce either tables or chairs. Zaid can work up to 10 hours a day. His production possibilities are given in the table below:
| Tables | Chairs |
| 0 | 100 |
| 10 | 80 |
| 20 | 60 |
| 30 | 40 |
| 40 | 20 |
| 50 | 0 |
- Construct the production possibilities frontier (PPF) for Zaid. Put tables on the Horizontal axis and chairs on the vertical axis.
- What is Zaid’s opportunity cost of producing one additional table?
- Currently Zaid is producing 20 tables and 40 chairs.
- Is this allocation of resources efficient? Why?
- Show this allocation on the graph and advise Zaid how he can be more efficient.
Question- 2
Suppose the market for Computer is given by the following equations for supply and demand:
Qd= 3300−2P
Qs= 500+8P
- Calculate the equilibrium price and quantity.
- Sketch the supply and demand curves on a graph indicating the equilibrium quantity and price.