Given The Below Table In Economics,please Explain The Production Possibility Show Transcribed DataShow Transcribed

Given the below table in Economics,please explain the production possibility

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Table 1-1 Production possibilities for the Wild Coast community

Expert Answer

This solution was written by a subject matter expert. It’s designed to help students like you learn core concepts.

Step-by-step

The table represents the production possibilities for the Wild Coast community, showing the different combinations of fish and potatoes that can be produced per day.

Explanation:

The production possibilities curve (PPC) illustrates the maximum output of one good that can be produced given the production level of the other good, assuming all resources are fully utilized and efficiently allocated.

In this case, the PPC shows the trade-off between producing fish and potatoes. As the community produces more fish, it must give up some potato production, and vice versa.

we can observe the following:

Possibility A: The community produces 0 baskets of fish and 100 kg of potatoes.

Possibility B: The community produces 1 basket of fish and 95 kg of potatoes.

Possibility C: The community produces 2 baskets of fish and 85 kg of potatoes.

Possibility D: The community produces 3 baskets of fish and 70 kg of potatoes.

Possibility E: The community produces 4 baskets of fish and 40 kg of potatoes.

Possibility F: The community produces 5 baskets of fish and 0 kg of potatoes.

Explanation:

As we move from possibility A to F, we can see that the community is increasing fish production while sacrificing potato production. This demonstrates the concept of opportunity cost, where producing more of one good requires giving up some quantity of the other good.

The PPC guides resource allocation, trade-offs, and specialization. It reveals production limits and potential gains. More fish means reallocating resources from potatoes, and vice versa. The PPC informs efficiency and trade-off decisions.