Flour is an ingredient used to make kolaches, but is not used to make queso. Which of these graphs shows what happens when the availability of flour increases?
Flour is an ingredient used to make kolaches, but is not used to make queso. Which of these graphs shows what happens when the availability of flour increases?
Chapter2: Scarcity And Opportunity Costs
Section: Chapter Questions
Problem 7E
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**Question:**
Flour is an ingredient used to make kolaches, but is not used to make queso. Which of these graphs shows what happens when the availability of flour increases?
**Choose 1 answer:**
**Graph A:**
- **Description:** This graph shows two production possibility curves (PPCs), labeled \( \text{PPC}_1 \) and \( \text{PPC}_2 \). Both curves are concave and depict the trade-off between the production of kolaches (y-axis) and queso (x-axis). The curve \( \text{PPC}_2 \) is positioned outward from \( \text{PPC}_1 \), indicating an increase in resources, specifically for kolaches.
**Graph B:**
- **Description:** A single PPC is shown with a downward shift at a point along the curve, suggesting a reallocation of resources, though not an expansion of capacity.
**Graph C:**
- **Description:** Similar to Graph A, two PPCs are shown with a shift from \( \text{PPC}_1 \) to \( \text{PPC}_2 \). The shift is parallel to the x-axis, indicating an increase in the ability to produce queso, rather than kolaches which are affected by flour availability.
**Graph D:**
- **Description:** Shows two PPCs with an outward shift from \( \text{PPC}_1 \) to \( \text{PPC}_2 \), similar to Graph A. The outward movement is along the y-axis, suggesting enhanced capacity specifically for kolaches due to increased flour availability.
**Graph E:**
- **Description:** Two PPCs are shown with a shift from \( \text{PPC}_2 \) to \( \text{PPC}_1 \), indicating a reduction in production capabilities, opposite to what is expected from increased flour supply.
**Correct Answer: Graph A or Graph D**
**Explanation:**
Graphs A and D correctly depict what happens when the availability of flour increases: the production possibility curve shifts outward for kolaches, as flour is used for kolache production. This outward shift means an increased capacity to produce kolaches while the capacity to produce queso remains unchanged since flour does not affect queso production.
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