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...

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 below. (It won't let me make a graph so I will just write it out)

Possibilities             Coconuts            Fish

A                                24                   0

B                                20                   1

C                                12                   2

D                                0                     3

- This questions asks three things 1.) Suppose Mr./Mrs. Crusoe ups his/her workday from 8 to 12 hours a day what will happen to the PPC?....

I have already created a production possibilities curve, what I don't understand is how time effects it? I have coconuts as the y axis and fish as the x axis

2.) If the castaway is operating on his/her PPC what main assumption has been met?...

All I could determine is that the castaway can collect coconuts faster than fish, is this what the question is asking?

3.) Explain what effect a ladder and a fishing rod likely would have on the castaway’s PPC

CAN SOMEONE PLEASE HELP ME WITH THESE QUESTIONS!

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted on

What a productions possibility curve is supposed to show you is A) that there are tradeoffs and opportunity costs because you have to make less of one thing to make more of another, B) that economies can function at or below their maximum efficiency, and C) that economic growth requires new inputs if an economy is already at full efficiency.  Let us use these ideas to answer your questions.

First, the PPC that you have made based on the numbers given assumes that Crusoe works 8 hours per day, right?  So what happens if they work 12 hours per day?  Will they be able to gather more coconuts and more fish?  I would hope so.  To show this, your PPC would have to move up and out because Crusoe should be able to do more in 12 hours than in 8.  This is an example of economic growth coming about because of a new input (more hours worked).

For your second question, it is not asking about whether Crusoe can gather coconuts or fish more effectively.  The main assumption of a PPC is that, when the economy is operating on the PPC, it is operating at full capacity.  In this case, it means that Crusoe cannot do any better than the limits imposed by the PPC.  He/she cannot, for example, catch 2 fish and get 20 coconuts in one day.  It is just not possible because Crusoe is already working as efficiently as possible given his/her resources.  So, the assumption is that the economy, in this case Crusoe, is working as well and as efficiently as possible.

Finally, think about what would happen if Crusoe got a ladder and/or a fishing pole.  Wouldn’t that make it easier for him/her to get coconuts and fish?  This should have the same sort of effect as Crusoe working more hours.  The ladder will let Crusoe climb the tree quicker and the fishing pole will presumably let him or her fish more easily.  Maybe now Crusoe will be able to get 24 coconuts AND 3 fish in one day, much more than was previously possible.  Again, the PPC will shift up and out if Crusoe gets these new resources.  Again, economic growth has occurred because of new inputs/resources coming into the economy.

Sources:

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