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? Oa. E b.C Oc.D d.B e. A

Dreamliners per period 18 16 12 8 4 8 dreamliners A 0 4 8 B QUESTION 15 Production levels to the right of the PPF are: O attainable efficient O inefficient. Ounattainable 12 Production possibility frontier E : F H ● The graph shows the PPF for Aeroland. Given the graph above, what is the opportunity cost of increasing Dreamliner production from 8 dream liners (point E) to 16 Dreamliners (point B)? O12 small jets O18 small jets O 6 small jets 16 18 20 Small jets per period

None

• Use the data from the table below to construct correctly labeled side-by-side graphs showing the production possibilities curve for Theo and Marlee. Assume that both have constant opportunity costs: Theo Marlee Bananas 20 50 Rice (in lbs.) 30 50 • Suppose that Theo and Marlee each spent half of their day making each good; Theo makes 10 bananas and 15 pounds of rice and Marlee makes 25 bananas and 25 pounds of rice. Show this point on the production possibilities curve of each person, and label that point X on your graph above. What is the total production of each good? • Suppose that Theo and Marlee agree to exchange 4 bananas for 5 pounds of rice. Under this agreement, Theo sells 15 pounds of his 30 pounds of rice to Marlee, in exchange for 12 of her 50 bananas. Show the new consumption points on the graph above for each person, and label these new consumption points Z.

A company that produces brass hardware for doors has the ability to produce up to 6,500 hinges per week but then is unable to produce doorknobs. Or it can produce up to 650 doorknobs per week but then is unable to produce any hinges. In the graph below, use the straight-line tool to draw the company's production possibilities frontier, where the quantities are per week (do not use the point tool to plot endpoints). Then use the point tool to plot a point to indicate the company's maximum output where it is producing exactly three times as many hinges as doorknobs. To refer to the graphing tutorial for this question type, please click here. Quartity ofinge 000 7500 000 4000 000 100 1000 Quartity of doorknot

20 New PPC 15 10 3 4 7. TRUCKS PER DAY Suppose Raphael is currently using combination D, producing one truck per day. His opportunity cost of producing a second truck per day is per day. Now, suppose Raphael is currently using combination C, producing two trucks per day. His opportunity cost of producing a third truck per day is per day. From the previous analysis, you can determine that as Raphael increases his production of trucks, his opportunity cost of producing one more truck Suppose Raphael buys a new tool that allows him to produce twice as many trucks per hour as before but doesn't affect his ability to produce puzzles. Use the green points (triangle symbol) to plot his new PPC on the previous graph. Because he can now make more trucks per hour, Raphael's opportunity cost of producing puzzles is it was previously. PUZZLES PER DAY