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Economics Micro question!?

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Economics Micro question!?

Postby ludano17 » Thu Feb 23, 2012 4:12 pm

Below is a production possibilities table for consumer goods (automobiles) and capital goods (forklifts):

Type of Production, Automobiles and Forklifts

Production Alternatives

Automobiles (x) 0 2 4 6 8

Forklifts (y) 30 27 21 12 0

PtA( 0,30) B( 2,27) C(4,21) D(6,12) E( 8,0)

If the economy is at point C, what is the cost of one more automobile? Of one more forklift? Explain how the production possibilities curve reflects the law of increasing opportunity costs.

c. If the economy characterized by this production possibilities table and curve were producing 3 automobiles and 20 forklifts, what could you conclude about its use of available resources?


Please help! im really confused :S

best answer will be chosen!
thanks in advance!!
ludano17
 
Posts: 25
Joined: Thu Mar 31, 2011 12:21 pm

Economics Micro question!?

Postby bercnan72 » Thu Feb 23, 2012 4:17 pm

when there is an increase in x there is proportionate increase in y . opportunity cost states the foregone income cost availed expected from the second best opportunity of using the resources .at point c it reaches the stage of equilibrium when consumer goods is alternative to capital or vice versa
bercnan72
 
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Joined: Thu Mar 31, 2011 8:51 pm


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