Rubberland's Production Possibilities 200
180
The accompanying graph contains the production
possibilities frontier (PPF) for Rubberland. Rubberland only
makes two products, rubber band balls and rubber hoses, and
on a given day can produce according to the PPF in the
graph. Point A on the PPF represents the combination of the
two goods Rubberland currently produces.
When a new method of rubber processing is discovered, the
productivity of all Rubberland's inputs increases. Please shift
the PPF to show this change.
160
140
120
Quantity of rubber band balls
100
80
60
40
Assume that Rubberland does not make more rubber band
balls than they originally made at point A but still maximize
their productive capabilities. Move point A to their new
production point.
How many more rubber hoses do they now produce per day
than before?
20
PPF
0
0
10
20
70
80
90
30 40 50 60
Quantity of rubber hoses
Incorrect
20
more hoses per day