Macmillan Learning a. The graph below shows a production possibility frontier (PPF) for cheese and bread. Place each point to illustrate the indicated situations. A E F IT efficient and maximum production of cheese efficient with a high opportunity cost for cheese inefficient output combination efficient with a high opportunity cost for bread efficient and maximum production of bread unattainable production combination b. Assume point D represents the socially optimal point. Point D illustrates Oopportunity efficiency. O normative efficiency. O allocative efficiency. marginal efficiency. Cheese 20 19 18 17 16 15 SH32129 14 11 10 8 67654 3210 A B ● Ⓡ C D C ● E ● F 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Bread

Macmillan Learning a. The graph below shows a production possibility frontier (PPF) for cheese and bread. Place each point to illustrate the indicated situations. A E F IT efficient and maximum production of cheese efficient with a high opportunity cost for cheese inefficient output combination efficient with a high opportunity cost for bread efficient and maximum production of bread unattainable production combination b. Assume point D represents the socially optimal point. Point D illustrates Oopportunity efficiency. O normative efficiency. O allocative efficiency. marginal efficiency. Cheese 20 19 18 17 16 15 SH32129 14 11 10 8 67654 3210 A B ● Ⓡ C D C ● E ● F 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Bread

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter13: General Equilibrium And Welfare

Section: Chapter Questions

Problem 13.1P

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Question

Learning
Macmillan
a. The graph below shows a production possibility frontier
(PPF) for cheese and bread. Place each point to illustrate the
indicated situations.
D
E
F
efficient and maximum production of cheese
efficient with a high opportunity cost for cheese
inefficient output combination
efficient with a high opportunity cost for bread
efficient and maximum production of bread
unattainable production combination
b. Assume point D represents the socially optimal point.
Point D illustrates
opportunity efficiency. O normative efficiency.
O allocative efficiency. Omarginal efficiency.
Cheese
O
20 19 18 17 16 1514131211 1098
7
6
5
43210
A B
●
с D E F
●
0
●
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Bread

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Step 1: Define production possibility frontier

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Step 2: Draw the points on the PPF curve

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Step 4: Reject incorrect options

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