ECON100: Economic Essentials for Business

Added on - 15 Mar 2021

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ECON100 Answers for Tutorial Submission1. Draw a production possibility frontier showing the trade-off between the production ofwheat and the production of barley.a). Show the effect that a prolonged drought would have on the initial production possibilityfrontier.Answer:The production possibility frontier in figure below are bowed to the right from the originbecause of increasing marginal opportunity costs. The drought causes the PPF to shift to theleft.b). Suppose genetic modification makes barley resistant to insects, allowing yields to double.Show the effect of this technological change on the initial production possibility frontier.Answer:The genetic modification will shift to the right the maximum barley production, but not themaximum wheat production.2. What is absolute advantage? What is comparative advantage? Is it possible for a country to
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