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Based on the graph provided  i. What is Freda’s marginal cost for each cookie? ii. What is Freda’s marginal cost for each Fudge? iii. Please draw Freda’s marginal cost curve for cookies and explain what the slope of the marginal cost curve is

Based on the graph provided  i. What is Freda’s marginal cost for each cookie? ii. What is Freda’s marginal cost for each Fudge? iii. Please draw Freda’s marginal cost curve for cookies and explain what the slope of the marginal cost curve is

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Based on the graph provided 

i. What is Freda’s marginal cost for each cookie?

ii. What is Freda’s marginal cost for each Fudge?

iii. Please draw Freda’s marginal cost curve for cookies and explain what the slope of the marginal cost curve is.

### Production Possibility Frontier: Fudge and Cookies #### Graph Explanation This graph represents a Production Possibility Frontier (PPF), illustrating the trade-off between two goods: fudge and cookies. - **Axes**: - The vertical axis represents the quantity of fudge. - The horizontal axis represents the quantity of cookies. - **Curve**: - The line is a straight downward sloping line from the point (0, 10) to (5, 0), suggesting a linear trade-off between fudge and cookies. As production of one increases, production of the other decreases. #### Interpretation - **Intercepts**: - At the point (0, 10) on the vertical axis, all resources are allocated to producing 10 units of fudge with no cookies being produced. - At the point (5, 0) on the horizontal axis, all resources are allocated to producing 5 units of cookies with no fudge being produced. - **Opportunity Cost**: - Moving along the line from one intercept to the other shows the opportunity cost of shifting resources. For every 1 unit increase in cookies, 2 units of fudge must be foregone. This model helps in understanding the concept of opportunity cost and efficient resource allocation in economics.
Transcribed Image Text:### Production Possibility Frontier: Fudge and Cookies #### Graph Explanation This graph represents a Production Possibility Frontier (PPF), illustrating the trade-off between two goods: fudge and cookies. - **Axes**: - The vertical axis represents the quantity of fudge. - The horizontal axis represents the quantity of cookies. - **Curve**: - The line is a straight downward sloping line from the point (0, 10) to (5, 0), suggesting a linear trade-off between fudge and cookies. As production of one increases, production of the other decreases. #### Interpretation - **Intercepts**: - At the point (0, 10) on the vertical axis, all resources are allocated to producing 10 units of fudge with no cookies being produced. - At the point (5, 0) on the horizontal axis, all resources are allocated to producing 5 units of cookies with no fudge being produced. - **Opportunity Cost**: - Moving along the line from one intercept to the other shows the opportunity cost of shifting resources. For every 1 unit increase in cookies, 2 units of fudge must be foregone. This model helps in understanding the concept of opportunity cost and efficient resource allocation in economics.
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Marginal Opportunity Cost :  Marginal Opportunity Cost may be defined as that amount of a good sacrificed for the production of an additional unit of other good. 

                                           MOC = Change in sacrificechange in gain

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