Opportunity cost and equilibrium price and quantity
Question- 1 Marks-3
Zaid can produce either tables or chairs. Zaid can work up to 10 hours a day. His production possibilities are given in the table below:
Construct the production possibilities frontier (PPF) for Zaid. Put tables on the Horizontal axis and chairs on the vertical axis.
What is Zaid’s opportunity cost of producing one additional table?
Currently Zaid is producing 20 tables and 40 chairs.
Is this allocation of resources efficient? Why?
Show this allocation on the graph and advise Zaid how he can be more efficient.
Question- 2 Marks-2
Suppose the market for Computer is given by the following equations for supply and demand:
1)Calculate the equilibrium price and quantity.
2)Sketch the supply and demand curves on a graph indicating the equilibrium quantity and price.