## PlotIT - Build a production possibility curve

The table below shows the production possibilities for country X. Calculate the figures in the third row of the table by calculating the opportunity cost of producing each extra unit of clothing. Jot these down on a piece of paper. You can check your answer if you want to.

Units of clothing | 0 | 1 | 2 | 3 | 4 | 5 | 6 |
---|---|---|---|---|---|---|---|

Units of food | 24 | 23 | 21 | 18 | 14 | 8 | 0 |

Opportunity cost of producing one extra unit of clothing | - |

Now use the first two rows of the table to plot the production possibility curve on the following diagram. Do this by clicking on each point in turn. Thus for the first point, click the mouse on the point that corresponds to 0 units of clothing and 24 units of food. Then click on the point corresponding to 1 unit of clothing and 23 units of food, and so on.

You may like to check your answer to see how your diagram compares.

Now assume that improvements in technology increase food production by 25 per cent. Fill in the new possibilities for food production and calculate the new opportunity costs of producing extra units of clothing. Jot these down on a piece of paper. You can check your answer if you want to.

Units of clothing | 0 | 1 | 2 | 3 | 4 | 5 | 6 |
---|---|---|---|---|---|---|---|

Units of food | 24 | 23 | 21 | 18 | 14 | 8 | 0 |

Opportunity cost of producing one extra unit of clothing | - | 1 | 2 | 3 | 4 | 6 | 8 |

Units of food after the change in technology | |||||||

New opportunity cost of producing extra units of clothing |

On the diagram above, plot the new production possibility curve by clicking on each of the points corresponding to rows 1 and 4 of the above table in turn as before. You may like to check your answer to see how your diagram compares.

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