Suppose the hypothetical country Cascadia can only produce two goods: furniture and paper. Further suppose there is only one factor of production, timber, which can be used to produce either furniture or paper in Cascadia. For the purpose of this question, you can assume there is only one kind of timber and it is equally good when producing furniture or paper. (ie: Cascadia doesn’t have any specialized factors of production.) If Cascadia allocates all of their timber supply to furniture production, they can produce 200,000 pieces of furniture. Alternatively, if they allocate all of their timber supply to paper production, they can produce 400,000 tons of paper.

a. Draw the PPF (production possibilities frontier) for Cascadia. Make sure to label both axes. Also don’t forget to show the greatest amount of paper and furniture they can produce. (4 pts)

b. What is the opportunity cost of producing one piece of furniture for Cascadia?(4 pts)

c. What is the opportunity cost of producing one ton of paper for Cascadia? (4 pts)

d. Consider the production point 100,000 pieces of furniture and 200,000 tons of paper. Show this production point on your plot from part a. Is this production point feasible? Is it efficient? (4 pts)

e. Now consider the production point 150,000 pieces of furniture and 200,000 tons of paper. Show this production point on your plot from part a. Is this production point feasible? (4 pts)

f. If the production point in part e is not feasible, how can Cascadia make it feasible? (5 pts)