Problem set. Chapter one. 1.
b. A straight-line ppf curve intersecting the Y axis at 1,000 units of luxury goods and intersecting the X axis at 500 units of necessity goods. These are the limits of production if all resources are used to produce only one good.
c. Unemployment or underemployment of labor would put the society inside the ppf. Full employment would move the society to some point on the ppf.
d. Answers will vary, but the decision should be based on the relative value of necessities and luxuries, and the degree of concern that all fellow citizens have enough necessities.