Consider an economy with just one technique available for the production of each

Question

Consider an economy with just one technique available for the production of each good, food and cloth:

GOOD----------------FOOD---CLOTH
Labor per unit output.....1..........1
Land per unit output......2..........1

Supposing labor equals 100 and land equals 150, write and sketch the production possibility frontier. (Hint: What are the intercepts of the production possibility frontier? When is land fully employed? Labor? Both?)

(You don't have to sketch it, providing the intercepts specified in the Hint will be just fine.)

Explanation / Answer

There will be no intercepts points when we combine both food and cloth The Intercept points are directly porpotionate When Land is fully utilised the inserpt is at 100 on X axis and even for Labour is same at 100 on X axis when both are fully utilised the intercept will not be possible

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