198 Chapter 1 Equations Please use the following equation(s) to help solve problems for this chapter. Equation for Per Unit Opportunity Cost Related concepts: comparative advantage, production possibilities model. (PPP) To calculate per unit opportunity cost we must set up a relative ratio or proportiorns. We will use quantities of goods or services produced in the ratio. In our example, we will produce good z of good y. Producer A: and Producer B: -4 and than =, Some students may be more accustom to For example, producer A can generate 65 tons of agricultural goods or 70 tons of industrial goods. These output levels represent the limits of goods production. 65 10 65 70 70 70 and 65 65 1 = .93 1.08 %3D %3D Using this table we may find all the ratios for some alternative productions in the model. Producer A Agricultural Industrial 50 45 25 65 50 2 45 50 50 0.9 2/12

198 Chapter 1 Equations Please use the following equation(s) to help solve problems for this chapter. Equation for Per Unit Opportunity Cost Related concepts: comparative advantage, production possibilities model. (PPP) To calculate per unit opportunity cost we must set up a relative ratio or proportiorns. We will use quantities of goods or services produced in the ratio. In our example, we will produce good z of good y. Producer A: and Producer B: -4 and than =, Some students may be more accustom to For example, producer A can generate 65 tons of agricultural goods or 70 tons of industrial goods. These output levels represent the limits of goods production. 65 10 65 70 70 70 and 65 65 1 = .93 1.08 %3D %3D Using this table we may find all the ratios for some alternative productions in the model. Producer A Agricultural Industrial 50 45 25 65 50 2 45 50 50 0.9 2/12

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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