Question

directions: use the production possibility frontier (the curve joining points a and b) shown below to answer the following questions. alabamas production possibilities frontier (ppf) 1) are there any non - feasible production points? if so, what are they and why are they non - feasible? 2) given the current ppf (the curve joining points a and b) would alabama choose to produce at point h? why or why not? 3) given the graph above, alabamas opportunity cost of producing more peaches in terms of soybeans changes in what way as we move from point a to b? give the definition of the law this illustrates. 4) suppose alabama experiences a long - term water drought that reduces its ability to produce all agricultural goods. the new alabama production possibilities frontier will most closely resemble a curve joining which two letters? 5) suppose a new super fertilizer is invented which allows farmers to greatly increase their growth of peach production and therefore peach production in alabama increases dramatically. assuming the ppf is originally the curve joining points a and b, the new alabama ppf will most closely resemble a curve connecting which two points?

Explanation:

1. Points outside the PPF (like point E) are non - feasible as they represent combinations of goods that cannot be produced given the current resources and technology.
2. Point H is inside the PPF. Alabama might choose it if resources are under - utilized or if there is inefficiency in production. It represents a situation where more of both goods could be produced with better resource allocation.
3. As we move from point A to B, the opportunity cost of producing more peaches in terms of soybeans increases. This illustrates the law of increasing opportunity cost, which states that as the production of a good increases, the opportunity cost of producing an additional unit of that good rises.
4. A long - term water drought reducing the ability to produce all agricultural goods will shift the PPF inward. The new PPF will most closely resemble a curve joining points S and J as overall production capacity for both goods is reduced.
5. If a new super - fertilizer increases peach production dramatically, the PPF will pivot outward along the peach axis. The new PPF will most closely resemble a curve connecting points A and M as only peach - production capacity increases significantly.

Answer:

1. Yes, point E is non - feasible because it is outside the PPF, meaning current resources and technology do not allow for that production combination.
2. Alabama might choose to produce at point H if there is inefficiency or under - utilization of resources since more of both goods could be produced with better use of resources.
3. The opportunity cost of producing more peaches in terms of soybeans increases. The law of increasing opportunity cost states that as the production of a good increases, the opportunity cost of producing an additional unit of that good rises.
4. Points S and J.
5. Points A and M.