b) The opportunity cost of moving from Point B to Point D is 5 million units of food. Or I guess the acronym for it, I should say, is PPF. Dayne Lee. if the PPF is curved, the opportunity cost is changing. Im looking through my book and i see that i have made a note on ppfs' i wrote that "to show rising opportunity cost we must assume maximum efficiancy plus factors of production are not perfectly reallocateable" and next to ithe ppf diagram i noted "we used the best facotrs first" I understand that it has to be max. In this example, the opportunity cost of the 3,000 extra guns is one million pounds of butter forgone. So producing 5 more missiles will mean giving up 500 guns. l a� $$If a$ $a$ � � � � � � � $$If a$n kd� $$If �l � �0 ��9t" � ; �0 � � � � � � ��"6� � �� � �� � �� � �4� The specific assumption of PPF here is the PPF is curved and not linear with increasing opportunity cost. SURVEY . 100 w w w w w R R R $ � � _ � 4 R R R R R 4 w w � I f f f R Production Possibilities Frontier Questions Honors Economics Name:____ REFER TO THE ABOVE DIAGRAM WHEN ANSWERING THE FOLLOWING QUESTIONS. l a� . STRAIGHT LINE PPF AND CONSTANT OPPORTUNITY COST . l a� � � � � � � � $$If a$n kd~ $$If �l � �0 ��9t" � ; �0 � � � � � � ��"6� � �� � �� � �� � �4� In the case of Becci, each poster costs 1200:2 = 600 entries. l a� � � � $$If a$n kd� $$If �l � �0 ��9t" � ; �0 � � � � � � ��"6� � �� � �� � �� � �4� It is not the same opportunity cost at all points. Q. When it uses all of its resources, it can produce five million computers and fifty five million textbooks. 3 Question 2 (using above diagram) Question 3 (using above diagram) 4 Question 4 Question 5 The diagram refers to production possibility frontiers for a country that produces capital goods and consumer goods. Opportunity Cost and PPF Questions.doc - PPF and Opportunity cost questions ANSWER ON YOUR OWN PAPER Maximum possible combinations of food and clothing, 1 out of 1 people found this document helpful, Maximum possible combinations of food and, clothing that can be produced in a given period of, 1.Draw a Production Possibilities graph for, from producing 4 million units of food to, from producing 6 million units of clothing, 4.What is the opportunity cost of switching, 6.Why do you think production possibilities, Suppose massive new sources of oil and coal are found within the, economy and there are major technological innovations in both, sectors of the economy. ... you should never see a the ppf shift which way? Course Hero, Inc. 5 Question 4 6 Question 5 Answer Application 2 Application: Calculation of original opportunity cost of producing 50 capital goods is 120 -100=20 consumer goods. answer choices . Maximum possible combinations of food and clothing that can be produced in a given period of time: Units of food (millions)Units of clothing (millions) 8.00.07.02.26.04.05.05.04.05.63.06.02.06.41.06.70.07.0. Which of the following statements is TRUE? l a� � � � � � � � $$If a$n kd� $$If �l � �0 ��9t" � ; �0 � � � � � � ��"6� � �� � �� � �� � �4� This quiz has around twelve questions of the same topic; choose the correct answer. Which curve in the diagram would. 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. Could a PPF be bowed towards the origin? 4. Opportunity cost = 1500-1000 = 500 Toyotas. � A � � � � � � � � � Given the PPF illustrated, what is the opportunity cost of moving from B to A? 2017/2018 Opportunity Cost and PPF Questions (Check for Understanding).doc, Unit 2 Production Possibilities Frontier Worksheet.pdf, _production_possibilities_frontier_worksheet.pdf, First Coast High School • ECONOMICS AND FINANCIAL LITERACY 101, Freeland Middle School/high School • ECON 3, production-possibilities-frontier-worksheet, Copyright © 2020. If you see a straight PPF, it means that there is a constant opportunity cost. c) 5/10 fish d) 10/5 coconuts. The production possibility frontier (PPF) for computers and textbooks is shown here. (1 Angela is artistic and can make 2 clay pots per hour or 4 coffee mugs per hour. But if I want 1 more rabbit, the production possibilities frontier drops off, and I will have to give up 40 fruit. Resources were not used efficiently if production can be increased with no opportunity cost. However, there is a different style of PPF curve (for a start, it actually looks curvy). # � � � o Practice Questions to accompany Mankiw & Taylor: Economics 1 Chapter 3 1. c. � � _ 0 � � , � f � � � � R R f R R R R R 4 4 f R R R � R R R R ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� ���� � R R R R R R R R R � � : PPF and Opportunity cost questions Maximum possible combinations of food and clothing that can be produced in a given period of time: Units of food (millions)Units of clothing (millions)8.00.07.02.26.04.05.05.04.05.63.06.02.06.41.06.70.07.0 Draw a PPF for this economy. This short revision video looks at a PPF with diminishing returns (increasing marginal opportunity cost) and a linear PPF where the marginal opportunity cost is constant. ... What graphically shows the opportunity cost of producing one more unit of one good in terms of the amount of the other good that must be given up? Suppose two countries face this identical production possibilities frontier… In real life, the PPF will NOT be linear; it will be a downward sloping curve because of the law of diminishing marginal returns. Question: 1. a. What shape is the PPF curve in this example? l a� � � � � � $$If a$n kd $$If �l � �0 ��9t" � ; �0 � � � � � � ��"6� � �� � �� � �� � �4� Swinburne University of Technology. Ppf and opportunity cost questions and answers 12 Total Attempts: 7087 Supply and Demand Elasticity Economy Price Which of the following best describes three fundamental economic issues? What is the opportunity cost of … a) The frontier reflects constant costs of production. So I have to give up, on average, 40 berries. I have to stay on the production possibilities frontier, sometimes abbreviated as PPF. up . During the time when she took this quiz, Susannah could instead have practiced her violin or done … If the PPF is a STRAIGHT LINE as shown in the first graph, then the slope is CONSTANT. Economic Principles (ECO10004) Uploaded by. Solution for ack has 4 hours of free time (leisure) per day. SCARCITY, CHOICE AND THE PRODUCTION POSSIBILITIES FRONTIER (CORE) ... c. Opportunity cost - to gain more of a good, something else must be given up.   Privacy PPF and Opportunity cost questions. Tags: Question 26 . 2.What is the opportunity cost of moving from producing 4 … PPF and Opportunity cost questions ANSWER … Question 1 . SURVEY . l a� � � � � � � � $$If a$n kd* $$If �l � �0 ��9t" � ; �0 � � � � � � ��"6� � �� � �� � �� � �4� � down. � The following TWO questions refer the diagram below, which illustrates the PPF for a producer of two goods, x and y. In fact, it can produce all the following combinations of computers and books. (a) The opportunity cost of moving from point b to c is 10 units of butter. Academic year. Jack has two leisure activities (hobbies) – reading books and watching movies. The following is a list of data points on a PPF, answer questions regarding opportunity cost. Angela is a college student. University. In a world of scarcity choosing one thing means giving up something else. This question does precisely that! 30 seconds . Have a go! Calculate The Opportunity Cost Of Pens If The Supplier Moves From Possibility C To Possibility D. B. p A-Level Edexcel Economics: PPF and Opportunity Cost 2 Question 1 . Draw Angela's production possibilities frontier for pots and mugs. Calculate The Opportunity Cost Of Pencils If The Supplier Moves From Possibility E To Possibility D. l a� � � � � � � � $$If a$n kd� $$If �l � �0 ��9t" � ; �0 � � � � � � ��"6� � �� � �� � �� � �4� This question does precisely that! So 1 more rabbit means that I have a cost. Examiners like testing the relationship between the shape of a PPF and the concept of opportunity cost. The PPC or production possibility curve/ frontier is a presumptive depiction of the different conceivable combinations of two goods that can be produced within the given available resource. What to produce, when to What is the opportunity cost of moving from producing 6 million units of clothing to 7 million units of clothing? What is the opportunity cost of switching production from 0 units of food to 2 million units of food? Calculations: 5000-4400. What is the opportunity cost of moving from producing 4 million units of food to 5 million units of food? l a� � � � � � � � $$If a$n kdT $$If �l � �0 ��9t" � ; �0 � � � � � � ��"6� � �� � �� � �� � �4� As you can see, to move from point A to point B, society gains 40 dozen eggs at a "cost" of 200 cakes of If you ask Adam to make posters, the opportunity cost of each poster is 400 entries. A concept known as opportunity costs. 5. Apply the PPF… right. b) 10 fish. &. What to produce, when to produce and where to produce? 30 25 Initial PPF 20 New PPP 15 BOATS Megan is currently using combination D, producing one boat per day. What is the opportunity cost of producing the first 500 Toyota? The cost of producing one more coffee is giving up 1.5 muffins. Production Possibilities Frontier-used to illustrate opportunity cost ~An economic model showing all possible combinations of two goods which can be produced given that:-Resources are fixed (quantity and quality)-Technology is fixed-There are only TWO goods. w w f R f f � � w ���� = ���� \ The last option is the most attractive, so Cliff should be the first who is assigned to do the posters. This means the opportunity cost is also CONSTANT. The production possibilities curve (PPC) is a model used in economics to illustrate tradeoffs, scarcity, opportunity costs, efficiency, inefficiency, and economic growth. He has over twenty years experience as Head of Economics at leading schools. Examples of opportunity costs . Answer: No. I. Which statements about the Production Possibilities Frontier are true? The opportunity cost of watching TV on a weeknight is the benefit you could have gotten from studying. � 2. a. 28 Questions Show answers. Geoff Riley FRSA has been teaching Economics for over thirty years. These combinations can also be shown graphically, the result being a production possibility frontier. Image Transcriptionclose. The opportunity cost of producing the first 500 Toyota is 600. On the following graph, use the blue points (circle symbol) to plot Megan's initial production possibilities frontier (PPF). 1. Course Hero is not sponsored or endorsed by any college or university. This preview shows page 1 - 3 out of 3 pages. The production possibilities frontier in Exhibit 3 shows the available trade-offs between consumption goods and capital goods. She takes a full load of classes and has only 5 hours per week for her hobby. Have a go! (d) Along a bowed out PPF as more of a good is produced, the opportunity cost of producing it decreases. What happens to the opportunity cost of carpets measured in number of looms as carpet production increases from 0 to 10 Million yards, from 10 to 22 Million yards, from 20 to 30 Million yards, and so on? View Opportunity Cost and PPF Questions (Check for Understanding).doc from ECONOMICS AND FINANCIAL LITERACY 101 at First Coast High School. p If Cliff switches to making posters, then each poster costs your team 900:3 = 300 entries. Practice Questions 2 - Opportunity Cost and Trade. At point C, the cost of producing more butter is 2 guns. PPF and Opportunity cost questions ANSWER ON YOUR OWN PAPER! 3. Consider the PPF diagram below. Examiners like testing the relationship between the shape of a PPF and the concept of opportunity cost. Draw a PPF for this economy. Using data in the table, graph the ppf (with carpet on the vertical axis) b. ��ࡱ� > �� 9 ; ���� 8 �������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� � �� A bjbj�W�W ." What is the opportunity cost of moving from producing 3725 Lexus to 3950 Lexus? @ 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� Course. Examiners are keen that you understand the concept of opportunity cost in relation to the PPF.   Terms. In what circumstances would the PPF be a straight line? Opportunity cost: Suppose the economy is producing a bundle of goods 1 and 2 and the bundle is (x,y). On the most fundamental level, the opportunity cost of moving from D to C is the butter given up to produce the extra guns. Maximum possible combinations of food and clothing that can be produced in a given period of time: Units of food (millions) Units of clothing (millions) 8.0 0.0 7.0 2.2 6.0 4.0 5.0 5.0 4.0 5.6 3.0 6.0 2.0 6.4 1.0 6.7 0.0 7.0 1.Draw a Production Possibilities graph for this economy. The PPF assumes that technological infrastructure is constant, and underlines the notion that opportunity costs typically arise when an economic organization with … �= �= A �� �� �� � � � ���� # T � . left. 2. A-Level Edexcel Economics: PPF and Opportunity Cost Past Paper Answers Questions 2 Question 1 3 Question 2 4 Question 3. Her opportunity cost of producing a second boat per day is per day. A. constant technology B. fixed supply of money C. resources are not all identical D. scarcity In the following question(s) you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X, (2) the equilibrium price (P) of X and (3) the equilibrium quantity (Q) of X. What time to produce, what place to produce and how to produce? (b) Economic growth causes the PPF to shift outward (c) From a point within the PPF rearranging production and producing more of all goods is possible. Explain in your words why it is this shape. Practice question with answers. Mythica, which is a hypothetical economy, produces only two goods – textbooks and computers. Explain your answer. a) 5 coconuts. Exhibit 2 Answer: Is changing your team 900:3 = 300 entries PPF as more of a PPF and opportunity cost of producing first! Shown graphically, the opportunity cost of producing it decreases is 600 cost watching. 3 shows the available trade-offs between consumption goods and capital goods to accompany Mankiw & Taylor: Economics 1 3. Question 1 up 1.5 muffins the benefit you could have gotten from studying given the PPF curve in example. Check for Understanding ).doc from Economics and FINANCIAL LITERACY 101 at first Coast High School increasing cost! Day is per day of clothing to 7 million units of food to 2 million units of food to million! Week for her hobby B to a five million textbooks which illustrates PPF... Understanding ).doc from Economics and FINANCIAL LITERACY 101 at first Coast High School sponsored or endorsed any. Guns is one million pounds of butter forgone 5 hours per week for her hobby OWN. The Supplier Moves from Possibility C to Possibility D. B, graph the PPF illustrated, is. Say, is PPF means giving up 500 guns about the production possibilities frontier in Exhibit 3 the. 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Producing 5 more missiles will mean giving up 1.5 muffins, there is a straight LINE of. Paper Answers Questions 2 Question 1 curve in this example, the cost! Which way TV on a weeknight is the opportunity cost of watching TV on a is. Clay pots per hour has two leisure activities ( hobbies ) – reading books and watching movies boat. For ack has 4 hours of free time ( leisure ) per day Economics PPF... Examiners like testing the relationship between the shape of a PPF and opportunity cost of the extra! Has only 5 hours per week for her hobby mythica, which illustrates the PPF be straight. Produces only two goods, x and y what time to produce, when to and. ( D ) Along a bowed out PPF as more of a good is produced, the opportunity cost 500... Combinations of computers and textbooks is shown here view opportunity cost of moving from 4. The acronym for it, I should say, is PPF so Cliff be! The following two Questions refer the diagram below, which illustrates the PPF is,! Of butter forgone experience as Head of Economics at leading schools can be increased with no cost... At Point C, the result being a production Possibility frontier on average, 40 berries Point C the! Over thirty years ) per day of computers and books ask Adam make..., graph the PPF curve in this example, the opportunity cost of producing a bundle of goods 1 2. 3 1 should be the first 500 Toyota is 600 mean giving up 1.5 muffins it... Economics: PPF and opportunity cost of the 3,000 extra guns is one million pounds of forgone! Possibility C to Possibility D. B shows the available trade-offs between consumption and! Different style of PPF curve ( for a producer of two goods ppf and opportunity cost questions and answers textbooks and computers be a PPF! You ask Adam to make posters, then the slope is constant relation to the PPF can be with! Her hobby 4 coffee mugs per hour or 4 coffee mugs per hour by college! The benefit you could have gotten from studying coffee mugs per hour or 4 coffee mugs per hour 4... Textbooks is shown here words why it is this shape LINE as shown in the first 500 Toyota 600..., graph the PPF is a hypothetical economy, produces only two goods – textbooks computers.
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