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Problem: Sulawesi is producing two products namely rice and corn using the existing level of resources and technology. Given these information, answer the following questions.
Required:
Question 1: Draw a typical production possibilities curve that represents Sulawesi's production of rice and corn. Label the curve as A.
Question 2: What are the assumptions used in deriving the production possibilities curve?
Question 3: Describe two characteristics of the curve and explain the reasons for each characteristic.
Question 4: What does the points inside the curve indicate?
Question 5: Draw a new curve B that illustrates the results of the recent earthquake on the production of rice and corn. Explain your graph.
Question 6: What would you expect the changes to the production possibilities curve be after international aid and assistance are given to Sulawesi by 2020? Draw a new graph indicating the changes from your new curve B (refer to question part e).
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