Refer to the production possibility curve for Marketopia below.

The graph indicates that with the resources and technology it has available, Marketopia

Question

Refer to the production possibility curve for Marketopia below.

The graph indicates that with the resources and technology it has available, Marketopia

BlackTom AI · Accepted Answer

To analyze the production possibilities, I first identify what the graph shows: the curve is a straight line from (0 eggs, 40 rye) to (20 eggs, 0 rye). This means the economy can either produce 40 units of rye when it produces 0 eggs, or 0 rye when it produces 20 eggs, and any combination along the line is a trade-off given current resources and technology.

Option 1: 'can produce either 40 units of rye or 20 units of eggs.' This is consistent with the endpoints of the PPF. The maximum rye is 40 when eggs are 0, and the maximum eggs is 20 when rye is 0, so this statement correctly reflects the frontier's endpoints.

Option 2: 'can produce both 40 units of rye and 20 units of eggs.' This would require a point that lies simultaneously at 40 rye and 20 eggs, which would be outside the PPF (beyond the frontier) since the curve represents the maximum production given resources. Therefore this is false.

Option 3: 'cannot produce both 20 units of rye and 5 units of eggs.' Checking the line, the combination (20 rye, 5 eggs) would lie well above the line or off the frontier, not on it. The PPF shows feasible production only along the line's points, so this specific combination is not feasible under the given resources.

Option 4: 'cannot produce both 20 units of rye and 10 units of eggs.' Similar to Option 3, (20 rye, 10 eggs) does not lie on the downward-sloping frontier shown. Since the frontier limits feasible combinations, this statement is also incorrect.

In summary, each incorrect option either asserts a combination that would lie inside or outside the frontier, while the correct option accurately captures the frontier’s endpoints and the trade-off implied by the curve.

Refer to the production possibility curve for Marketopia below. The graph indicates that with the resources and technology it has available, Marketopia

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