Question

suppose that a simple society has an economy with only one resource, labor. labor can be used to produce only two commodities—x, a necessity good (food), and y, a luxury good (music and merriment). suppose that the labor force consists of 100 workers. one laborer can produce either 5 units of necessity per month (by hunting and gathering) or 10 units of luxury per month (by writing songs, playing the guitar, dancing, and so on). using the line drawing tool, draw this economy’s production possibilities frontier (ppf). (be sure that the ppf intersects both the y-axis and the x-axis.) carefully follow the instructions above and only draw the required object.

Explanation:

Step1: Find X-intercept (all labor on X)

Total workers = 100, 1 worker produces 5 X. So total X = \(100 \times 5 = 500\). Thus, X-intercept is (500, 0).

Step2: Find Y-intercept (all labor on Y)

1 worker produces 10 Y, so total Y = \(100 \times 10 = 1000\). Y-intercept is (0, 1000).

Step3: Draw PPF

Connect (500, 0) and (0, 1000) with a straight line (since resources are perfectly substitutable here, PPF is linear).

(Note: Since this is a drawing instruction, the key is to identify the two intercepts. The line should pass through (500, 0) on the X - axis (Necessity) and (0, 1000) on the Y - axis (Luxury).)

Answer:

To draw the PPF, plot the points (500, 0) (where all labor is used for X) and (0, 1000) (where all labor is used for Y), then draw a straight line connecting these two points.