Answer to Question #95693 in Microeconomics for SHAHADAT HOSSEN

Question

Mention 3 shift factors of PPF. Suppose, American and Japanese workers can each
produce 4 cars a year. An American worker can produce 20 tons of paddy a year, whereas
a Japanese worker can produce 5 tons of paddy a year. Assume that each country has 100
million workers. (i) Graph the PPF of American economy, (ii) for the United States, what
is the opportunity cost of a car?

Answer 1

1.Shifts in the production possibilities curve are caused by changes in these things: advances in technology, changes in resources, investment in education and other training opportunities.

2.If U.S. has 100 millions workers it can produse either 400 millions cars or 2000 millions tons of paddy, so PPF for USA is:

3.To calculate opportunity cost of car we can write this equation:

$4car=20paddy$

$car=5paddy$