level of technology.

Country

Saudi

Arabia

United

States

Oil Production using 100 worker hours

Corn Production using 100 worker hours

(barrels)

(bushels)

100

50

or 25

or 100

TABLE 19.2 Production Possibilities before Trade

FIGURE 19.2 Production Possibilities Frontiers (a) Saudi Arabia can produce 100 barrels of oil at maximum and

zero corn (point A), or 25 bushels of corn and zero oil (point B). It can also produce other combinations of oil and

corn if it wants to consume both goods, such as at point C. Here it chooses to produce/consume 60 barrels of oil,

leaving 40 work hours that to allocate to produce 10 bushels of corn, using the data in Table 19.1. (b) If the United

States produces only oil, it can produce, at maximum, 50 barrels and zero corn (point A'), or at the other extreme, it

can produce a maximum of 100 bushels of corn and no oil (point B'). Other combinations of both oil and corn are
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