a. Draw a PPF map (put soda in the vertical axis and pizza in the horizontal axis), showing all the points on the PPF. b. What is the opportunity cost of an extra pizza when you are on segment AB? What about when you are at segment CD? (i.e., how many sodas you have to give up in order to get an extra pizza? SHOW YOUR WORK!) c. What is your PPF's shape? Is it a straight line or does it have a bowed outward shape? Justify! d. Suppose that there is a new technology that affects ONLY the production of soda. Illustrate this effect on your PPF map.
a. Draw a PPF map (put soda in the vertical axis and pizza in the horizontal axis), showing all the points on the PPF. b. What is the opportunity cost of an extra pizza when you are on segment AB? What about when you are at segment CD? (i.e., how many sodas you have to give up in order to get an extra pizza? SHOW YOUR WORK!) c. What is your PPF's shape? Is it a straight line or does it have a bowed outward shape? Justify! d. Suppose that there is a new technology that affects ONLY the production of soda. Illustrate this effect on your PPF map.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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