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Draw the production possibility frontiers

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Reference no: EM133390534

Case: Suppose that Portugal has 48 workers. 12 Portuguese workers can produce a bottle of wine and 6 Portuguese workers can produce a jar of olives. So Portugal can produce a maximum of 4 bottles of wine and a maximum of 8 jars of olives.

South Africa also has 48 workers. 2 South African workers can produce a bottle of wine and 3 South African workers can produce a jar of olives. So South Africa can produce a maximum of 24 bottles of wine and a maximum of 16 jars of olives.

Question 1: Draw the production possibility frontiers for these two countries.

Question 2: Calculate the opportunity cost of producing a bottle of wine in each country

Reference no: EM133390534

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