ALGONQUIN COLLEGE Online vfAssignment #1 This assignment relates to the following Course Learning Requirements: CLR1: Define economics and explain the basic principles of economics Objective of Assignment: The objective of this assignment is to measure your understanding of the role of scarce resources and unlimited wants in economics, your ability to apply the concept of opportunity cost to real world situations, and your ability to construct and use the Production Possibilities Curve model to illustrate economic choice. Pre-Assignment Instructions: Complete up-to and including module two, including assigned readings and work. Assignment Tasks: 1) Production Possibilities Curve Consider a bakery that produces two baked goods, muffins and bread loafs. Draw your own a production possibilities curve for the two products. The drawing can be either digitally created or an uploaded picture of a hand drawn curve (in either scenario, ensure the information is legible and clear) a) Label the axis b) Draw and label a point (A), to demonstrate a scenario where one muffins is allocated more of the resources. (1 points) c) Draw and label a second point (B), where bread loafs is more of the resources. (1 points) d) Shade the area of possible production green. (1 points) e) Shade the area outside of the limits of production red. (1 points) f) Explain how the curve would change, should a new technology be invented that reduced the waste of the inputs (resources) - draw the change on the graph. (2 points) 2) Opportunity cost Page 1 of 4Page 1 of 4 ALGONQUIN COLLEGE | Online Consider the same bakery. With an hour remaining in his shift, the baker has noticed there is a limited amount of flour remaining (10 kg to be exact). Given the limited time, the baker can use the flour to bake muffins or bread loafs, but not both. Option A: to bake muffins, requires 1 kg of flour per dozen and generates profit of $2 per dozen. Option B: to bake bread loafs, requires 1.5 kg of flour per loaf and generates a profit of $2.50 per loaf. a) Determine the opportunity cost of choosing Option A over Option B. (2 points) b) Determine which option you would choose, and explain why. (2 points) Submission Procedures: Your assignment should be typed (Calibri or Arial, 12-point font) and submitted as a digital document (e.g., Word, PDF). Clearly label each response (1(a), 1(b), etc.). For calculations, show all your work to receive full credit. Submit your completed assignment by [Deadline]