Exploring Production Possibilities

4. Suppose that Crusoe and Friday live together on an isolated island. Each day, Crusoe can either catch four fish or gather eight coconuts, and Friday can either catch six fish or gather three coconuts. Compute the production outcomes of this economy in the table below.

Total Coconuts
Total Fish

Both fish

Friday fishes, Crusoe gathers

Crusoe fishes, Friday gathers

Both gather

When you complete the table above, you have not constructed a production-possibilities frontier because one of these possibilities is not ON the frontier, but inside of it. Which one of the four is inside the frontier?


5. Suppose we have a mini-economy with only three resources, which are in the form of fields of grain. They produce as follows:


Field A



Field B



Field C


a) If all three fields are used to produce corn, how much corn can this little economy produce? How much oats will it produce if all three fields are used to produce corn? (Hint: This is meant to be as simple as it looks.)

b) If all three fields are used to produce oats, how much corn will this little economy produce? How much oats will be produced?

c) In parts a and b you computed two of the points on the production-possibilities frontier. Now compute the other two and fill in the four points of the production possibilities frontier below.



d) Is the point 100 corn and 200 oats possible?

e) Is the point 200 corn and 100 oats possible?

f) If field B is left empty, what happens to the production-possibilities frontier?

 You want more? Click here for a more elaborate version of the problem above.

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