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INDIVIDUAL ASSIGNMENT Question 1: Illustrate and hear how the outturn possibilities bourn nominate demonstrate the concept of prospect cost. Sollution: The exertion possibilities frontier shows the combinations of output that the prudence can advance mayhap when they use tot each(prenominal)y their resources ( human, technology, etc) . In this case, we image our combinations be Bicycles and Motorbikes. in that respect argon 3 positions on this graph. 1. Points on the frontier: A, B, C, D If we just focus on takings of Bicycle, we use all the resources that our frugality has, we will bring on 600 products and none Motorbike. Conversely, we can possibly expose maximum twain cardinal Motorbikes without any Bicycles. On the dapples B and C, we produce both Bicycles and Motorbikes so the morsel of product of each compass point are divided. For example, our economy can produce 400 Bicycles and one hundred forty Motorbikes at B, 440 Bicycles and 120 Motor bikes at C. We recognize the number of Bicycles increases eyepatch the number of Motorbikes mitigates. Our economys resources are limited. If we requisite to devise the productivity of one souvenir we must try for to decrease other. We cant improve both two degrees productivity because the economys mightiness is limited. on that point are uncountable points on this line and they stimulate the same essence with A, B, C, D. 2.

Points outside the frontier manage E: At this point the promotion in both 2 item initiate over the economys ability. We cant produce like what we want. We need to reduce the output of one item or both. 3. Point inside the frontier like F: We tot ally make output like this points but it sho! ws our economy is not effective because we dont use all our resources or we waste our resources. We need to inspect our economys activities and have suitable strategies. Question 2: Suppose the charter and supply curves for good Y are as follows: QD = 600 - 7.5P QS = -100 + 10P where P is price per kg measured in dollars and Q is quantity measured in 000kgs (a)...If you want to get a full essay, arrangement it on our website: OrderEssay.net

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