Question Bank Software Introductory Microeconomics Case Study Questions With Answer Key Case Study Every society has to determine how to allocate its scarce resources to different goods and services. An allocation of the scarce resources of the economy gives rise to a particular combination of different goods and services. “The collection of all possible combinations of the goods and services that can be produced from a given amount of resources and a given stock oftechnical knowledge is called the Production Possibility Frontier of the economy”. Given below is an example of an economy producing corn or cotton by using its resources. Table given shows the different combinations of corn and cotton that the economy can produce when its resources are fully utilised. Production Possibilities Possibilities A B C D E Corn 01234 Cotton 109740 (a) What is a ‘Production Possibility Frontier’? (b) If all the resources are used in the production of corn, how much is the maximum amount of corn that can be produced? (c) If all the resources are used in the production of cotton, how much is the maximum amount of cotton that can be produced? (d) When the given consumer moves from Possibility A to E, what does it indicate?