A B C D E
Automobile 0 2 4 6 8
Forklifts 30 27 21 12 0
If the economy characterized by this production table and curve were producing 3 auto and 20 forklifts, what could you conclude about its use of its available resources?
As 3 automobiles fits between (2 autos, 27 forklifts) and (4 autos, 21 forklifts) but 20 forklifts is less than 21, you can conclude that the economy is producing below its maximum output.
To determine what can be concluded about the use of available resources, you need to analyze the production table and curve.
The production table shows the amount of output (in this case, automobiles and forklifts) that can be produced by using different combinations of inputs (resources) A, B, C, D, and E.
The production curve visually depicts the possible production combinations for automobiles and forklifts by connecting the points on the production table.
Based on the information provided, if the economy is producing 3 automobiles and 20 forklifts, you can find the corresponding combination of inputs on the production table.
Looking at the table, you can see that to produce 3 automobiles, you need to use 4 units of input A, 2 units of input B, 0 units of input C, 0 units of input D, and 0 units of input E.
Similarly, to produce 20 forklifts, you need to use 12 units of input A, 21 units of input B, 27 units of input C, 30 units of input D, and 0 units of input E.
By comparing these input combinations to the available resources, you can draw conclusions about their use:
1. Input A: The economy is using 4 units of input A to produce 3 automobiles, which means there are 6 units of input A remaining. For forklift production, it requires 12 units of input A, so there is a surplus of 6 units of input A available.
2. Input B: The economy is using 2 units of input B to produce 3 automobiles and 21 units of input B to produce 20 forklifts. Therefore, there is a shortage of 19 units of input B.
3. Inputs C, D, and E: The economy is not using any units of inputs C, D, and E for automobile production. There are no inputs of C and E required for forklift production either. However, there is a shortage of 3 units of input D for forklift production.
In conclusion, based on the given production table and the fact that the economy is producing 3 automobiles and 20 forklifts, it can be concluded that there is a surplus of input A, a shortage of input B, and a shortage of input D in the use of available resources.