The pairs that would be on Namibia's production possibilities frontier are (200 huts, 40,000 bowls) and (150 huts, 30,000 bowls) (option B).
<h3>What are the pairs on the possibilities frontier?</h3>
The Production possibilities frontiers is a curve that shows the various combination of two goods a company can produce when all its resources are fully utilised.
The PPC is concave to the origin. This means that as more quantities of a product is produced, the fewer resources it has available to produce another good.
Opportunity cost of the next best option forgone when one alternative is chosen over other alternatives. The pairs that would be on the frontier are the options that have an opportunity cost of 200 bowls when 1 hut is produced.
Opportunity cost of these pairs: (200 huts, 40,000 bowls) and (150 huts, 30,000 bowls)
- Opportunity cost = 40,000 / 200 = 200
- Opportunity cost = 30,000 / 150 = 200
Here is the complete question:
Assume for Namibia that the opportunity cost of each hut is 200 bowls. Which of these pairs of points could be on Namibia's production possibilities frontier?
a. (200 huts, 30,000 bowls) and (150 huts, 35,000 bowls)
b. (200 huts, 40,000 bowls) and (150 huts, 30,000 bowls)
c. (300 huts, 50,000 bowl) and (200 huts, 60,000 bowls)
d. (300 huts, 60,000 bowls) and (200 huts, 80,000 bowls)
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