Assignment 1- The Federal Republic of Achiever

80. Assignment 1- The Federal Republic of Achiever

The Federal Republic of Achiever is dominated by industrious citizens. The maximum hours
available for production is 2,000 hours.
Choices
Time allocated (hours) Quantity (kg)
Tomato Wheat tomato Wheat
A 2000 0
B 1800 200
C 1600 400
D 1400 600
E 1000 800
F 1500 1500
1a) Use the data presented in the table above to answer the following questions:
i. Supposing it takes 2 hours to produce 1 kilogram of tomato and 1 kilogram of wheat,
calculate the quantity of tomato and wheat that will be produced at each choices.
ii. Draw the production possibility frontier (PPF).
iii. Which of the choices are efficient and inefficient?
iv. Using the PPF in 1aii above, briefly explain efficiency and inefficiency.
v. Use the PPF in 1aii above to illustrate the concept of trade-off and marginal opportunity
costs.
1b) What is the impact of the following on Achiever’s production possibility frontier. Draw a
separate PPF for each question.
i. More adults immigrate to the Republic of Achiever from neighbouring countries.
ii. River Shallow overflows its bank and many farm lands are flooded.
iii. Professor Smart at the University of Achievers developed high yielding seeds.
iv. Many graduates from the University of Achievers accepted various public service jobs.
Question 2 (50%)
products eastein westien
wine 2 10
bread 10 20
a) The table above shows the production of one worker in one week for the Republic of
Eastein and Republic of Westein. Use the data presented in the table to answer the
following questions:
i. Calculate the opportunity costs for both countries.
ii. Who has absolute advantage in the production of wine and bread?
iii. Who has comparative advantage in the production of wine and bread?
iv. Should both countries trade? Justify your answer with simple graphs.
eastein westien
wine bread wine bread
0 21 0 36
2 18 2 33
4 15 4 30
6 12 6 27
8 9 8 24
10 0 10 0
b) The table above shows the production of wine and bread at Republic of Eastein and
Republic of Westein. Use the data presented in the table to answer the following
questions:
i. Suppose Eastein produces and consumes 4 litres of wine and 15 loaves of bread while
Westein produces and consumes 6 litres of wine and 27 loaves of bread, should they
specialize and trade? Justify your answer with the data or graphs where applicable.
ii. Draw PPF curve for both Republic of Eastein and Republic of Westein and show the
impact of specialization and trade on the production and consumption levels of both
countries.
iii. Supposing Vineyards were infested by parasites at the Republic of Eastein, should both
countries continue to trade?
but for the question 2b remember each number falls under a roll so both eastien and weastin have number under wine and bread

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