___________A B C D E Automobile 0 2 4 6 8 Forklifts 30 27 21 120 Based on the ta

Question

___________A B C D E
Automobile    0 2 4 6 8
Forklifts     30 27 21 120
Based on the table above:- If the economy characterized by this production table andcurve were producing 3 auto and 20 forklifts, what could youconclude about its use of its available resources? And that would production possiblitiescurve indicate? Whatmust occur before the economy can attain such a level ofproduction?
___________A B C D E
Automobile    0 2 4 6 8
Forklifts     30 27 21 120
Based on the table above:- If the economy characterized by this production table andcurve were producing 3 auto and 20 forklifts, what could youconclude about its use of its available resources? And that would production possiblitiescurve indicate? Whatmust occur before the economy can attain such a level ofproduction?

Explanation / Answer

As 3 automobiles fits between (2 autos, 27 forklifts) and (4autos, 21 forklifts) but 20 forklifts is less than 21, you canconclude that the economy is producing below its maximumoutput. The economy must have full use of its limited resources toproduce at a point on the production possibilities curve.

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