The Production Possibilities Model
Part 1
A modern-day Robinson Crusoe (perhaps a lost soul from one of those ‘Reality Shows’, so-called, on TV) expends 8 hours a day on two basic “Survival” tasks – gathering coconuts and catching fish. This activity can be described by the Production Possibilities Schedule immediately below.
| POSSIBILITIES | COCONUTS | FISH |
| A | 24 | 0 |
| B | 20 | 1 |
| C | 12 | 2 |
| D | 0 | 3 |
With the help of the data in the schedule above, answer each of the following questions.
- Determine the opportunity costs the ‘castaway’ would incur to catch the first, second and third fish respectively. (3)
- Is the ‘law of increasing opportunity costs’ at work here? Explain your answer. (1)
- What’s the shape of the PPC in this case? What does this shape signify? (1)
- If the castaway is operating on his/her PPC what main assumption has been met? (1)
- Suppose Mr./Ms. Crusoe ups his/her workday from 8 to 12 hours per day. What would likely happen to the PPC? (1)
- Explain what effect a ladder and a fishing rod likely would have on the castaway’s PPC. (2)
Part 2
Once you receive feedback on your assignment, please reflect on your teacher’s comments in the dropbox:
- What will you work on for your next assignment?
- If you could do it again, what would you do differently?
