The following table provides various combinations of two goods that can be produced within an economy.

Question
Combination Toothbrushes (Units) Toasters (Units)
1 67 0
2 64 5
3 61 10
4 57 15
5 51 20
6 44 25
7 31 30
8 0 35

 

(a) Draw the production possibility frontier.

(b) On this diagram, clearly mark:

i) An efficient point as point A

ii) An inefficient point as point B

iii) An unattainable point as point C

(c) Calculate the opportunity cost of:

i) getting 30 additional toothbrushes by moving from combination 7 to combination 3.

ii) getting 15 additional toasters by moving from combination 3 to combination 6.

(d) What is likely to cause a shift of the frontier from combination 1 to combination 2?

(e) What is likely to cause a shift of the frontier from combination 3 to the inefficient point B in (b ii)?

(f) What is likely to cause an outward shift of the frontier from any of the combinations in the table to the unattainable point C in (b iii)?

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