Limits of Production Possibilities
Explore: How does the availability of resources affect production possibilities?

This interactive graph illustrates the efficient use of society's resources and the impact of changing amounts of resources society may have to work with. The initial level of resources available to this society indicates a production possibilities curve where 60 units of Good X could be produced if all of society's resources are devoted to Good X, and 60 units of Good Y could be produced if all of Good Y is produced. The infinite number of other production possibilities is indicted by all the points on the curve. Read the instructions in the applet and then answer the following questions.

1. Press Reset so the slider for the number of resources for Good X and Good Y lies in the middle. Using your mouse, click on the combination 35 units of Good X and 40 units of Good Y. Why is this indicated as an efficient production possibilities point given society's resources?
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2. Press Reset so the slider for the number of resources for Good X and Good Y lies in the middle. Using your mouse, click on the combination 20 units of Good X and 20 units of Good Y. Why is this an inefficient production possibilities point given society's resources?
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3. Press Reset so the slider for the number of resources for Good X and Good Y lies in the middle. Using your mouse, click on the combination 70 units of Good X and 40 units of Good Y. Why is this indicated as an unattainable production possibilities point given society's resources?
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4. Press Reset so the slider for the number of resources for Good X and Good Y lies in the middle. Use your mouse to drag the slider for the amount of resources available for the production for Good X all the way to the right, indicating more resources available for the production of Good X. What happens to the production possibilities curve? What can we now say about the combination of 70 units of Good X and 40 units of Good Y that was unattainable in part (c) above?
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5. Press Reset so the slider for the number of resources for Good X and Good Y lies in the middle. Use your mouse to drag the slider for the amount of resources available for the production for Good Y all the way to the right, indicating more resources available for the production of Good Y. What happens to the production possibilities curve?
   See answer here
6. Press Reset so the slider for the number of resources for Good X and Good Y lies in the middle. Use your mouse to drag the slider for the amount of resources available for the production for Good X and Good Y all the way to the right, indicating more resources available for the production of both goods. What happens to the production possibilities curve?
   See answer here