To analyze the given production possibility curve (PPC) and identify the proper allocation of resources, we need to identify the key data points that illustrate how resources are distributed between the production of hats and apples.
The provided solution gives us three pieces of information:
1. The number of data points.
2. The quantities of hats produced at each data point.
3. The quantities of apples produced at each data point.
We will break this information down step by step:
1. Number of Data Points:
The number of data points illustrating the proper allocation of resources is 5.
2. Quantity of Hats Produced:
At each data point, the quantities of hats produced are as follows:
- At data point 1: 100 hats
- At data point 2: 90 hats
- At data point 3: 70 hats
- At data point 4: 40 hats
- At data point 5: 0 hats
3. Quantity of Apples Produced:
At each data point, the quantities of apples produced are as follows:
- At data point 1: 0 apples
- At data point 2: 30 apples
- At data point 3: 50 apples
- At data point 4: 70 apples
- At data point 5: 90 apples
By analyzing these data points on the PPC, we can observe the trade-offs between the production of hats and apples. From this, we see that there is an inverse relationship between the quantity of hats and apples produced.
For example:
- When the production of hats is at its maximum (100 hats), no apples are produced.
- Conversely, when the production of apples is at its maximum (90 apples), no hats are produced.
Intermediate allocations show different combinations of the two goods, reflecting various levels of resource allocation efficiency. Each point on the curve represents an efficient production point, suggesting the economy is fully utilizing its resources.
This allocation pattern helps us understand the opportunity costs involved in shifting resources from one good to another, highlighting the fundamental economic concept of trade-offs.
