The labor force of an island country consists of only five w

The labor force of an island country consists of only five workers. There are only two industries in this island, one producing X and the other producing Y. The following graph shows the production possibilities frontier (PPF) for this country. It shows the effects on the production of X and Y from shifting workers from one industry to the other one worker at a time. For example, suppose that currently X = 1 and Y-90. Now, if we shift one worker from Y to X production, the production of X will increase to X = 2 and the production of Y will decrease to Y = 75. There are no externalities. 105 100 95 90 85 80 75 70 65 S 55 50 45 40 35 30 25 20 15 10 0 0 4 X Production

Solution

a) 35 units (100-65)

b) 35 units (65-30)

c) 30 units (30-0)

d) Not applicable

However, it seems that you have uploaded a wrong image because examiner cannot ask you opportunity cos to fa combination not given in ppf.