Society can produce food (F) and health care (H) according to the following prod
ID: 1187029 • Letter: S
Question
Society can produce food (F) and health care (H) according to the following production possibilities frontier: 5H2 + 2F2 = 10,000. Suppose a goal is set to produce 40 units of health care and 50 units of food. What does this goal represent?
a.
Underutilization
b.
Infeasibility
c.
Technological change
d.
Efficiency
Brief explaination why the answer is correct too. (I am using Principles of Microeconomics by N. Gregory Mankiw 6h Edition, a page number would be great!)
a.
Underutilization
b.
Infeasibility
c.
Technological change
d.
Efficiency
Explanation / Answer
5H2 + 2F2 = 10,000
putting the values we have
5*40*40+2*50*50
=13000
This is greater than 10000.
This represent technological change. As the computed value is greater than the production possibilities frontier. this must have been possible or would be possible due to advancement in technology that has led to increase in productivity. As the technology advances, its efficiency also increases. so the no comes greater than that represented by the equation.