2.4.3. Transformation schedules production possibility curve; production possibility frontier This schedule shows various alternative combinations of two goods that a nation can produce when all of its factor inputs(land, labor, capital, entrepreneurship) are used in their most efficient manner
2.4.3. Transformation schedules production possibility curve; production possibility frontier This schedule shows various alternative combinations of two goods that a nation can produce when all of its factor inputs (land, labor, capital, entrepreneurship) are used in their most efficient manner
Production possibility schedules for wheat and cloth in the United States and the United Kingdom Under constant costs United States United cloth Kingdom United states Wheat Cloth Wheat Cloth 120 180 0 60 150 50 80 120 40 60 90 30 60 80 20 30 100 10 100 120 0306090120150180 wheat
United States United Kingdom Wheat Cloth Wheat Cloth 180 150 120 90 60 30 0 0 20 40 60 80 100 120 60 50 40 30 20 10 0 0 20 40 60 80 100 120 Production possibility schedules for wheat and cloth in the United States and the United Kingdom Under constant costs 120 wheat cloth United States 0 30 60 90 120 150 180 100 80 60 40 20
United States United cloth Kingdom United Kingdom Wheat Cloth Wheat Cloth 120 100 180 0 60 150 50 20 120 40 40 40 60 90 60 30 60 80 20 20 30 100 10 100 0 120 0204060 wheat
United States United Kingdom Wheat Cloth Wheat Cloth 180 150 120 90 60 30 0 0 20 40 60 80 100 120 60 50 40 30 20 10 0 0 20 40 60 80 100 120 120 100 80 60 40 20 0 20 40 60 wheat cloth United Kingdom
cloth United States cloth United Kingdom 120 120 100 100 80 60 20 40 0306090120150180 0204060 wheat wheat For each 30W that the United States gives up, just enough resources are released to produce an additional 20C. That is 30W=20C,so1W=2/3C Thus, the opportunity cost of one unit of wheat in the United States is 2/3C
For each 30W that the United States gives up, just enough resources are released to produce an additional 20C. That is, 30W=20C ,so 1W=2/3C Thus,the opportunity cost of one unit of wheat in the United States is 2/3C 120 wheat cloth United States 0 30 60 90 120 150 180 100 80 60 40 20 120 100 80 60 40 20 0 20 40 60 wheat cloth United Kingdom
cloth United States cloth United Kingdom 120 120 100 100 80 60 20 40 0306090120150180 0204060 wheat wheat In U.s.A Marginal rate transformation MRT=A Cloth /WHeat= slope =120/180=2/3 Same, the opportunity cost of wheat in the U.K. is 1W=2C Marginal rate transformation MRT=A Cloth /WHeat slope 120/60=2
In U.S.A Marginal rate transformation MRT= Cloth / Wheat = slope = 120/180 = 2/3 Same, the opportunity cost of wheat in the U.K. is 1W=2C Marginal rate transformation MRT= Cloth / Wheat = slope = 120 / 60 = 2 120 wheat cloth United States 0 30 60 90 120 150 180 100 80 60 40 20 120 100 80 60 40 20 0 20 40 60 wheat cloth United Kingdom