it is related to for an economy that produces public good(y)and private good (x)
asked Jun 7, 2013 in Calculus Answers by anonymous

Your answer

Your name to display (optional):
Privacy: Your email address will only be used for sending these notifications.
Anti-spam verification:

To avoid this verification in future, please log in or register.

1 Answer

PPF is shown in the above graph: x^2+100y^2=500.

The quantity of good x is the horizontal axis and the quantity of good y is the vertical axis.

The slope at any point on the PPF is given by x/100y.

If we take two examples x=10 and x=20 the slope at these points is 10/200=1/20 and 20/100=1/5 respectively. In other words, at the point where the quantity of good x is 10 and 20 respectively. At around x=22 the quantity of x is almost at its maximum potential.

This means that the tradeoff between good x and good y is the decrease in production of y by one unit allowing the increase of x by 20 units in the first case; and in the second case, the tradeoff of one unit of y allows the increase of 5 units of x, where x is realising its maximum potential.

answered 4 days ago by Rod Top Rated User (429,200 points)

Related questions

Welcome to MathHomeworkAnswers.org, where students, teachers and math enthusiasts can ask and answer any math question. Get help and answers to any math problem including algebra, trigonometry, geometry, calculus, trigonometry, fractions, solving expression, simplifying expressions and more. Get answers to math questions. Help is always 100% free!
78,072 questions
81,866 answers
1,825 comments
61,243 users