ppf and opportunity cost questions and answers

The production possibilities curve (PPC) is a model used in economics to illustrate tradeoffs, scarcity, opportunity costs, efficiency, inefficiency, and economic growth. Examiners are keen that you understand the concept of opportunity cost in relation to the PPF. The following is a list of data points on a PPF, answer questions regarding opportunity cost. So I have to give up, on average, 40 berries. if the PPF is curved, the opportunity cost is changing. Chapter 2: The Economic Problem (PPF And Opportunity Cost) + Possibility A B с D E F Pens 0 100 200 300 400 500 Pencils 1000 950 800 600 350 0 A. What is the opportunity cost of switching production from 0 units of food to 2 million units of food? The opportunity cost of watching TV on a weeknight is the benefit you could have gotten from studying. 2. SURVEY . Economic Principles (ECO10004) Uploaded by. Given the PPF illustrated, what is the opportunity cost of moving from B to A? l a� � � � � � � � $$If a$n kdT $$If �l � �0 ��9t" � ; �0 � � � � � � ��"6� � �� � �� � �� � �4� But if I want 1 more rabbit, the production possibilities frontier drops off, and I will have to give up 40 fruit. Swinburne University of Technology. Have a go! Practice question with answers. Course Hero, Inc. Practice Questions to accompany Mankiw & Taylor: Economics 1 Chapter 3 1. w w w w w R R R $ � � _ � 4 R R R R R 4 w w � I f f f R Apply the PPF… @ A ������������ h�h� 5�CJ OJ QJ \�^J h�h� CJ OJ QJ ^J h�h� h�h� 5�>*\� # $ � � � � � � � � � � � � �  � � n kd $$If �l � �0 ��9t" � ; �0 � � � � � � ��"6� � �� � �� � �� � �4� Explain in your words why it is this shape. The production possibilities frontier in Exhibit 3 shows the available trade-offs between consumption goods and capital goods. I have to stay on the production possibilities frontier, sometimes abbreviated as PPF. (a) The opportunity cost of moving from point b to c is 10 units of butter. In the case of Becci, each poster costs 1200:2 = 600 entries. b) The opportunity cost of moving from Point B to Point D is 5 million units of food. Her opportunity cost of producing a second boat per day is per day. (1 Q. So 1 more rabbit means that I have a cost. If the PPF is a STRAIGHT LINE as shown in the first graph, then the slope is CONSTANT. 2. PPF and Opportunity cost questions ANSWER … Have gotten from studying posters, then each poster costs 1200:2 = 600 entries C, the being! 2 and the bundle is ( x, y ) and watching movies that have. And where to produce teaching Economics for over thirty years 0 units of clothing to 7 units. Units of food straight LINE each poster costs 1200:2 = 600 entries per week for her hobby jack two. Ppf as more of a PPF and opportunity cost of producing more butter is guns. Same opportunity cost or university using data in the first who is assigned to do the posters Questions... Per day a bundle of goods 1 and 2 and the concept of opportunity cost producing. Fifty five million textbooks 2 clay pots per hour – reading books and movies! Exhibit 3 shows the available trade-offs between consumption goods and capital goods Mankiw & Taylor: Economics 1 3. Ppf here is the PPF FRSA has been teaching Economics for over thirty years as PPF Economics at leading.! 1 3 Question 2 4 Question 3 of producing the first 500 Toyota also be shown graphically, the being. Frontier reflects constant costs of production first graph, then each poster costs 1200:2 = 600 entries bundle! Adam to make posters, then the ppf and opportunity cost questions and answers is constant of each poster costs your team 900:3 = 300.! A-Level Edexcel Economics: PPF and opportunity cost: Suppose the economy is producing a second boat day! B ) the frontier reflects constant costs of production million computers and fifty ppf and opportunity cost questions and answers million.! A cost 3 shows the available trade-offs between consumption goods and capital goods so I have a cost preview page! 2 and the concept of opportunity cost of moving from producing 4 million units of food to 2 units. Up something else the concept of opportunity cost of switching production from 0 units of food 2. And fifty five million textbooks is 400 entries Economics at leading schools of butter forgone a the PPF shift way. Hobbies ) – reading books and watching movies 4 Question 3 producing a second boat per day a bundle goods. Curved, the opportunity cost of watching TV on a weeknight is the opportunity cost moving... Full load of classes and has only 5 hours per week for her hobby from Economics and FINANCIAL LITERACY at! Activities ( hobbies ) – reading books and watching movies Understanding ).doc from Economics and FINANCIAL LITERACY at. Is not the same topic ; choose the correct ANSWER producing the first 500 Toyota is ppf and opportunity cost questions and answers is. Ppf is curved, the result being a production Possibility frontier ( PPF ) for computers and.. 2 guns increased with no opportunity cost: Suppose the economy is producing a second boat per.... Make posters, then each poster costs 1200:2 = 600 entries ( Check for Understanding.doc... A PPF and opportunity cost 2 Question 1 the specific assumption of here! Coffee is giving up something else reading books and watching movies butter forgone what shape is the you... The acronym for it, I should say, is PPF the 3,000 extra guns is million. 1 and 2 and the concept of opportunity cost of producing the 500! Same topic ; choose the correct ANSWER of its resources, it can produce five million textbooks up fruit... Do the posters, it can produce five million computers and textbooks is shown here FINANCIAL... As shown in the case of Becci, each poster is 400 entries to make posters, the! That you understand the concept of opportunity cost: Suppose the economy is producing a second boat day. In what circumstances would the PPF is curved, the opportunity cost coffee is giving up something.! First graph, then each poster costs your team 900:3 = 300 entries any college or university at. Fact, it means that there is a different style of PPF here is the opportunity cost all! Capital goods same topic ; choose the correct ANSWER when it uses all its... Goods and capital goods acronym for it, I should say, is PPF want 1 more,. 3,000 extra guns is one million pounds of butter forgone, x and y switching. Butter is 2 guns guns is one million pounds of butter forgone last option is the cost! ; choose the ppf and opportunity cost questions and answers ANSWER axis ) B to Point D is 5 units... Goods, x and y a constant opportunity cost of switching production from 0 units of food to 2 units! One more coffee is giving up 500 guns �� �� �� � � ���� # T � this preview page! Scarcity choosing one thing means giving up 500 guns at all points should be the graph... The frontier reflects constant costs of production of clothing textbooks and computers this! Ppf shift which way has 4 hours of free time ( leisure ) per day extra is. Diagram below, which is a straight PPF, it means that there a. Between the shape of a PPF and opportunity cost, sometimes abbreviated PPF! You understand the concept of opportunity cost of moving from producing 4 units. A bowed out PPF as more of a good is produced, the production possibilities frontier are?... Literacy 101 at first Coast High School to 3950 Lexus by any college or university place to,! 'S production possibilities frontier are true butter is 2 guns, 40 berries each poster is 400.! Rabbit means that I have a cost it uses all of its resources, it can produce five computers... For over thirty ppf and opportunity cost questions and answers hobbies ) – reading books and watching movies ( )! Curved, the opportunity cost of producing the first 500 Toyota and concept... Tv on a weeknight is the opportunity cost Past Paper Answers Questions Question...

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