Question

A firm produces amounts X and Y of two different grades of bread using the Same production process.The production possibility curve (ppc) showing the maximum output of either good attainable for any given level of output of The other is given by
X^2+2X=10-Y
a) what are the largest amounts of x and y that can bet produced
b) What amounts of x and y must be produced to have
i) 0.25Y=X
ii) Y=2X

Answer 1

1) ans is 4

PPC production possibility curve shows different combination of two goods which an economy can produce with given inputs and technoogy. in other word the maximum of other goods given the production of 1st.

2) ans is 1

comparative advantage tells us the range of the price for which both nation can benefit from trade.

comparative advantage is based on opportunity cost. A nation have comparative advantage in a good in which it have the least opportunity cost in producing it.

Thank you...