DQuestion 3 3 pts Given the graph below showing the producti

DQuestion 3 3 pts Given the graph below showing the production possibilities frontier for Iceland and Finalnd: a. (1 pts) Where is the opportunity cost of raising one more Yak greater, at \"A\" or \"B\" How do you know? b. (I pt) Iceland\'s PPF curves, while Finland\'s PPF is straight. Please explain what this means. c. (1 pt) Is the combination of Reindeer and Yaks represented by point \"B\" efficient, not efficient, not feasible, feasible or both efficient and feasible for Iceland? Raindeet celand PPF Finland PPF Yaks

Solution

1a. :- The absolute value of Production Possibility Frontier curve determines the opportunity cost of producing the goods in X-Axis. As the absolute value of slope at B is more, there will be higher opportunity cost for Iceland to raise Yak.

1B:-The straight PPF related to Finland indicates that there is a constant opportunity cost associated with raising yaks. On the other hand the curved PPF belonging to Iceland indicates that there is an increasing opportunity cost for raising yaks.

1c. We can state that Point b is an efficient point as it lies on the PPF curve which indicates that all the resources are fully utilized by Iceland while raising reindeer and yaks

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