### Example on production possibility curve

Assignment Help Macroeconomics
##### Reference no: EM13128731

Individuals, firms, governments, and countries are faced with choices because all resources are scarce. A production possibility curve (see below) measures the maximum combination of outputs that can be achieved from a given number of inputs. In practice economists use a production possibility curve with two goods to explain the concept of opportunity cost.

In the example below the two goods that a country can produce are health care and education.

Use the graph above to answer the following questions:

a. How many units can be produced if a country uses all of its resources on health care?

b. How many units can be produced if a country uses all of its resources on education?

c. If a country is currently producing 11 units of health care and 16 units of education, what is the opportunity cost of producing 5 more units of education?

While a production possibility curve describes the possible combinations of output that can be produced with a given set of inputs, it does not tell us who should receive, and in what amount, the health care and education that gets produced. Write an essay of at least 300 words but no more than 600 words in length that discusses how you would decide to distribute the health care and education that gets produced. Your essay should explain the role of critical thinking and of Saint Leo's core values in making your decision.

Instructions

Please write a logically developed, unified essay that shows your understanding of the subject matter. The essay should be between 300 and 600 words in length. Make sure that you have a thesis (a main point that you are making) and develop it thoroughly and coherently. Use specific examples based on empirical evidence (from direct observation or experience) and clear, standard English.

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