Name ___________________________________

1. The following data give the production possibilities of an economy that produces two types of
goods, cloth (horizontal axis) and wheat (vertical axis).
Production
Cloth Wheat
Possibilities
A 0 105
B 10 100
C 20 90
D 30 75
E 40 55
F 50 30
G 60 0
a. Graph the production possibilities frontier.

b. Explain why Point D is efficient while Point H is not.

c. Indicate by drawing an 'X' where production is unattainable. To achieve this currently

unattainable production combination, what must happen (two possible answers)?

d. Calculate the per-unit opportunity cost of an increase in the production of cloth, or the
production of wheat, in each of the following cases.
From Point A to Point B?

From Point F to Point E?

From Point C to Point D?

PART 2 PA