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Ah-Hong realizes that he can't finish preparing for both Economics and Accounting before the midterm. After evaluating, he concludes that if he spends all his time on Economics, he can score 90 points, but get 0 in Accounting. Conversely, if he spends all his time on Accounting, he can score 85 points, but get 0 in Economics. (a) Plot the production possibility frontier (PPF) with Economics score on the horizontal axis and Accounting score on the vertical axis. (b) Using the concept of opportunity cost, explain the significance of the PPF being concave towards the upper right. (c) Now assume the PPF is a straight line. What is the opportunity cost of increasing the Economics score by 1 point?

Ah-Hong realizes that he can't finish preparing for both Economics and Accounting before the midterm. After evaluating, he concludes that if he spends all his time on Economics, he can score 90 points, but get 0 in Accounting. Conversely, if he spends all his time on Accounting, he can score 85 points, but get 0 in Economics. (a) Plot the production possibility frontier (PPF) with Economics score on the horizontal axis and Accounting score on the vertical axis. (b) Using the concept of opportunity cost, explain the significance of the PPF being concave towards the upper right. (c) Now assume the PPF is a straight line. What is the opportunity cost of increasing the Economics score by 1 point?

MACROECONOMICS FOR TODAY
MACROECONOMICS FOR TODAY
10th Edition
ISBN:9781337613057
Author:Tucker
Publisher:Tucker
Chapter2: Productions Possibilities, Opportunity Costs, And Economic Growth
Section: Chapter Questions
Problem 10SQ
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Ah-Hong realizes that he can't finish preparing for both Economics and Accounting before the midterm. After evaluating, he concludes that if he spends all his time on Economics, he can score 90 points, but get 0 in Accounting. Conversely, if he spends all his time on Accounting, he can score 85 points, but get 0 in Economics. (a) Plot the production possibility frontier (PPF) with Economics score on the horizontal axis and Accounting score on the vertical axis. (b) Using the concept of opportunity cost, explain the significance of the PPF being concave towards the upper right. (c) Now assume the PPF is a straight line. What is the opportunity cost of increasing the Economics score by 1 point?
Transcribed Image Text:Ah-Hong realizes that he can't finish preparing for both Economics and Accounting before the midterm. After evaluating, he concludes that if he spends all his time on Economics, he can score 90 points, but get 0 in Accounting. Conversely, if he spends all his time on Accounting, he can score 85 points, but get 0 in Economics. (a) Plot the production possibility frontier (PPF) with Economics score on the horizontal axis and Accounting score on the vertical axis. (b) Using the concept of opportunity cost, explain the significance of the PPF being concave towards the upper right. (c) Now assume the PPF is a straight line. What is the opportunity cost of increasing the Economics score by 1 point?
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