If a country directs all of its resources into producing one item, it can produce a maximum of either 2,000 computers or 10,000 books. The country can also produce a combination of these two goods, but the opportunity cost of producing either item will remain the same. They also have several beneficial trade partners. The residents of the country want to consume a combination of 1,500 computers and 8,000 books, assuming that no economic growth will occur in the near future. Which of the following is a viable option to achieve the resident's desired consumption? A. The country could only achieve this through trade B. The country could achieve this either through domestic production or trade C. The country could only achieve this through domestic production D. The country could not achieve this by any means

Question

If a country directs all of its resources into producing one item, it can produce a maximum of either 2,000 computers or 10,000 books. The country can also produce a combination of these two goods, but the opportunity cost of producing either item will remain the same. They also have several beneficial trade partners. The residents of the country want to consume a combination of 1,500 computers and 8,000 books, assuming that no economic growth will occur in the near future. Which of the following is a viable option to achieve the resident's desired consumption?  A. The country could only achieve this through trade B. The country could achieve this either through domestic production or trade C. The country could only achieve this through domestic production D. The country could not achieve this by any means

GPT-4o mini · Answer

To determine the viable option for achieving the desired consumption of 1,500 computers and 8,000 books, we need to analyze the production constraints and opportunity costs given.

From the information provided, we know:

The maximum production capacity is either 2,000 computers or 10,000 books.
The opportunity costs are constant, meaning that to produce more of one good, a specific amount of the other good needs to be sacrificed.

Production Possibilities

The country has the following extremes in production if it only produces either good:

If it produces 2,000 computers, it cannot produce any books.
If it produces 10,000 books, it cannot produce any computers.

Given the desired consumption is:

1,500 computers
8,000 books

Production Capacity Check

To find out if the desired consumption can be produced domestically, we need to calculate if it's possible to allocate resources to produce the combination of goods:

Computers: The country would need to produce 1,500 computers.
Books: The country would need to produce 8,000 books.

Calculating the opportunity cost:

If the country produces 2,000 computers, it could produce 0 books.
If the country produces 0 computers, it could produce 10,000 books.

From the extreme points, we can derive the production relationship:

For every 2,000 computers produced, the production of 10,000 books is possible, which implies that the trade-off is linear between the two goods.

Now, we need to check if the country can produce 1,500 computers and 8,000 books:

This would mean operating somewhere in the middle of the production capacity curve.

Feasibility Check:

The country must allocate resources within its limits to meet the desires of the residents, but:

To produce 1,500 computers: This would imply that there are only 500 computers left to balance with books (because 2,000 - 1,500 = 500 possible books).
The highest possible number of books it could produce based on that would not support 8,000 books since 1,500 computers would yield only a small proportion of books due to the production limit.

Conclusion:

Since the combination of goods desired by the residents exceeds the production capacity given the resource constraints, the country could not achieve this by any means without exceeding its limits.

Thus, the correct answer to the scenario is:

D. The country could not achieve this by any means.