A country produces books and video games exclusively. In the same time it takes to produce one video game, the country could produce 4 books. If the country only focused on one of the goods to produce, the maximum amount the country can produce is either 200 video games or 800 books. They can create a combination of the two goods, but the opportunity cost for production will remain the same. If the country would like to consume a combination of 100 video games and 1,400 books, which of the following is true?(1 point)

Question

Responses

It is impossible for the country to consume a combination of 100 video games and 1,400 books.
It is impossible for the country to consume a combination of 100 video games and 1,400 books.

This is only possible if the country produces 600 more books and 100 fewer video games itself.
This is only possible if the country produces 600 more books and 100 fewer video games itself.

The country can produce 600 more books and 100 fewer video games itself, or it can engage in trade.
The country can produce 600 more books and 100 fewer video games itself, or it can engage in trade.

The country might consume 100 video games and 1,400 books following trade.

Answer 1

To determine whether the country can consume a combination of 100 video games and 1,400 books, we need to analyze its production capabilities.

The country can produce:

• 200 video games (if it produces only video games)
• 800 books (if it produces only books)

From the information given, we know that:

1. It takes the same amount of time to produce one video game as it does to produce 4 books (or conversely, producing 1 book takes 1/4 the time of producing 1 video game).
2. Consequently, to produce one video game, the opportunity cost is equal to the production of 4 books.

With this in mind, we can plot the production possibility frontier (PPF) of the country, which shows the maximum combinations of the two goods that can be produced with limited resources.

To analyze the situation:

• Maximum of 200 video games corresponds to 0 books.
• Maximum of 800 books corresponds to 0 video games.
• Each combination along the path between these two extremes should respect the opportunity cost.

If the country wants to consume 100 video games and 1,400 books:

• To find out how many books they would have to produce to reach this level of consumption, we need to determine if this consumption is feasible given their production capacity.

To see if 100 video games and 1,400 books can be produced:

• Producing 100 video games would take resources equivalent to 400 books (since each video game corresponds to an opportunity cost of 4 books).
• Therefore, to produce 100 video games and 1,400 books, the total resource use can be calculated as follows:
  • Required books for video games: 400 books
  • Total books required: 400 books (for video games) + 1,400 books = 1,800 books.

Now, compare this need to the maximum production capacity:

• The maximum number of books that can be produced when producing at maximum capacity is 800 books. Hence, it is not possible for the country to produce 1,800 books, as it exceeds the country's maximum production capability.

Conclusion: It is impossible for the country to consume a combination of 100 video games and 1,400 books, as the books needed exceed the production capacity.

So the correct response is: It is impossible for the country to consume a combination of 100 video games and 1,400 books.