Activity 1 Date:
In-Class Exercise – Production possibilities frontier (PPF)
1. Given the following production possibilities curve:
10
N
8
Sheltor (unite)
10
20
30
O
Food (unita)
a. Does this production possibilities curve show increasing opportunity costs? Explain.
b. What is the opportunity cost of moving from point I to point D? Explain.
c. What is the opportunity cost of moving from point C to point B?
d. Which of points A-E is the most efficient? Explain.