Chapter2: Economic Tools And Economic Systems
Section: Chapter Questions
Problem 3.5P
Related questions
Question
![Vuvuzela production
(in thousands)
Figure 6.8 A PPC showing opportunity cost
They have traded off 4 bags of apples and they have gained 2 bags of potatoes.
The opportunity cost of the 2 bags of potatoes is 4 bags of apples.
y expanding this example to the greater society, the production possibility
urve clearly shows how a change in the production of one product can affect the
to
roduction of another and the cost implications of that change.
Activity 6: Illustrate opportunity cost on a PPC
Use the production possibility curve of Vuvuzelaville to answer the questions that follow.
1. What is the opportunity cost (in vuvuzelas or soccer
balls) if there is a move from Point A to Point C?
(1)
200
180 -
2. What is the opportunity cost if there is a move from
160-
Point B to Point C?
(1)
140-
3. What is the opportunity cost if there is a move from
120 -
Point D to Point B?
(1)
100 -
80 -
4. What is the opportunity cost if there is a move from
60-
Point C to Point A?
40 -
5. What is the opportunity cost if there is a move from
20
Point A to Point D?
(1)
0.
10
15
20
25
[5]
Soccer balls (in thousands)
Figure 6.9 Production possibility curve of
Vuvuzellaville
Unit 2: Maximising satisfaction from limited resources](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd681e41c-1d2e-4c43-ad27-d68af33ba7c3%2F1f996805-ac27-4840-aaa0-b33d18b41a98%2Feg66z3j_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Vuvuzela production
(in thousands)
Figure 6.8 A PPC showing opportunity cost
They have traded off 4 bags of apples and they have gained 2 bags of potatoes.
The opportunity cost of the 2 bags of potatoes is 4 bags of apples.
y expanding this example to the greater society, the production possibility
urve clearly shows how a change in the production of one product can affect the
to
roduction of another and the cost implications of that change.
Activity 6: Illustrate opportunity cost on a PPC
Use the production possibility curve of Vuvuzelaville to answer the questions that follow.
1. What is the opportunity cost (in vuvuzelas or soccer
balls) if there is a move from Point A to Point C?
(1)
200
180 -
2. What is the opportunity cost if there is a move from
160-
Point B to Point C?
(1)
140-
3. What is the opportunity cost if there is a move from
120 -
Point D to Point B?
(1)
100 -
80 -
4. What is the opportunity cost if there is a move from
60-
Point C to Point A?
40 -
5. What is the opportunity cost if there is a move from
20
Point A to Point D?
(1)
0.
10
15
20
25
[5]
Soccer balls (in thousands)
Figure 6.9 Production possibility curve of
Vuvuzellaville
Unit 2: Maximising satisfaction from limited resources
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Includes step-by-step video
Trending now
This is a popular solution!
Learn your way
Includes step-by-step video
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Brief Principles of Macroeconomics (MindTap Cours…
Economics
ISBN:
9781337091985
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning