15 10 5 PPF 3 4 Pizzos (millions) 5 a) Any point inside the PPF b) Cannot be judged with the given data c) Any point beyond the PPF d) Any point on the PPF. Cola (milions of conm

Suppose an economyuses two resorces (labor and capital) to produce two goods (wheat and cloth). Captial is relativley more useful in prducing cloth, and labor ir relativley more useful in prducing wheat.  If the supply of cpatial falls by 10% and the suppy of labor increases by 10%, how will the PPF for wheat and cloth change?

3. Country A and Country B are two countries that each produce t-shirts (T) and sneakers (S). From its available resources and technology Country A can produce 100 t-shirts and 0 sneakers or 0 tshirts and 200 sneakers or any combination of t-shirts and sneakers that sits on Country A’s linear PPF. From its available resources and technology Country B can produce 50 t-shirts and 0 sneaker or 0 t-shirt and 50 sneakers or any combination of t-shirts and sneakers that sits on Country B’s linear PPF. a. On two separate graphs draw the PPF for Country A and Country B. Measure t-shirts on the vertical axis and sneakers on the horizontal axis. b. Write an equation in slope-intercept form for the PPF for Country A. c. Write an equation in slope-intercept form for the PPF for Country B

product Y 50- 40+ 30+ 20 ਵ ਦ 10+ 0+ 0 Fig. A a b C d 10 20 30 40 50 product X 07. Comparing the production possibilities frontiers in figures A and B, O a) the PPF in figure A indicates increasing opportunity costs of X. O b) the PPF in figure B indicates decreasing opportunity costs of X. O c) resources in the economy depicted in figure A are specialized. O d) the PPF in figure B indicates increasing opportunity costs of X only. e) None of the above product Y 50 우8 & 은 40 a 30+ 20+ Fig. B 10+ b d C. e 0++ 0 10 20 30 40 50 product X

Question 16 The fact that the PPF usually bows away from the origin implies that O getting more of one good means getting less of another good. as the production of any good increases, there is a decrease in the opportunity cost of producing it. O getting more of one good means getting more of another good. as the production of any good increases, there is an increase in the opportunity cost of producing it.

1

which seems to be correct?

QUESTION 9 wine 90 80 70 60 50 40 30 20 10 0 0 10 England d) 2 bottles of wine/yard O e) 3 bottles of wine/yard PPF 20 30 40 50 09. What is the relative price (opportunity cost of one yard) of cloth in Portugal? O a) 1/3 bottles of wine/yard O b) 1/2 bottle of wine/yard O c) 4 man-hours/yard 60 cloth wine 90 80 70 60 50 40 30 20 10 0 0 10 Portugal PPF 20 30 40 50 60 cloth

1. Suppose that the country of Greece has only one factor of production, labour, and can produce at most 1500 units of olives and at most 6000 units of cheese. (a) Draw the PPF of Greece, with cheese on the vertical axis. What is the oppor- tunity cost of producing cheese? What must be the relative price of olives for Greece to specialise in producing olives? To produce both goods? Pc

Suppose there are three people that can bake bread or making pies. The first is Merrick whose opportunity cost of making pies is 1/2 a loaf of bread. Egg's opportunity cost is 1 loaf of bread per pie. Robert's opporunity cost is 2 loaves of bread per pie. The daily joint PPF is depicted below: Loav es of Bread 27 • E 20 10 14 24 29 Pies Which point is unattainable? O a. E b.C c. D d.B e. A