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
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