Questions: 1) What is the production possibility frontier? You may equate the wheat and cars on the axis to define the story. 2) What is the opportunity cost of expanding production from 150 cars to 250 cars? 3) Would a plant producing 400 units of wheat and 250 cars be feasible? Would it be efficient? If not, what is required for it to be efficient?

Let's address the questions one by one based on the provided data.

The Production Possibility Frontier (PPF) is a curve that illustrates the maximum feasible amount of two commodities that a business can produce when those resources are allocated efficiently. The table provided shows different combinations of wheat and cars that can be produced:

\[ \begin{tabular}{|c|c|c|} \hline Maximum annual output options & Wheat & Cars \\ \hline A & 1,000 & 0 \\ \hline C & 800 & 150 \\ \hline D & 600 & 250 \\ \hline E & 400 & 325 \\ \hline F & 200 & 375 \\ \hline & 0 & 400 \\ \hline \end{tabular} \]

To determine the opportunity cost of increasing car production from 150 to 250, we need to look at the corresponding decrease in wheat production:

• At 150 cars (point C), wheat production is 800 units.
• At 250 cars (point D), wheat production is 600 units.

The opportunity cost is the amount of wheat forgone to produce the additional 100 cars (from 150 to 250 cars):

\[ \text{Opportunity Cost} = 800 \text{ units of wheat} - 600 \text{ units of wheat} = 200 \text{ units of wheat} \]

So, the opportunity cost of expanding production from 150 cars to 250 cars is 200 units of wheat.

To determine if producing 400 units of wheat and 250 cars is feasible and efficient, we need to check if this combination lies on the PPF:

• From the table, at 250 cars (point D), the maximum wheat production is 600 units.
• At 400 units of wheat, the maximum car production is 325 cars (point E).

Since 400 units of wheat and 250 cars lie within the range of the PPF, it is feasible. However, it is not efficient because it does not lie on the PPF curve itself. Efficiency requires that the production combination be on the PPF curve, meaning all resources are fully utilized.

To make it efficient, the production should be adjusted to one of the points on the PPF, such as producing 600 units of wheat and 250 cars (point D) or 400 units of wheat and 325 cars (point E).