Assignment Tasks:

There are two questions. Q1 is about the production possibilities curve. Q2 is about opportunity cost.

1. Production Possibilities Curve

Consider a bakery that produces apple pies and brownies.

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). For this question, you are submitting a graph of the production possibilities curve only with the labels noted below. You do not provide explanations.

1. Label the axis and draw your curve.
2. Label a point (A), to demonstrate a scenario where more resources are allocated to baking only apple pies. (1 points)
3. Label a second point (B), where more of the resources are allocated to baking only brownies. (1 points)
4. Shade the area of possible production blue. (1 points)
5. Shade the area outside of the limits of production orange. (1 points)
6. Suppose all bakers are enrolled in training and their productivity increases.

Draw the change on the graph. (2 points)

1. Opportunity cost
   1. Determine the opportunity cost of choosing Option A over Option B. (2 points)

Consider the same bakery. With an hour remaining in his shift, the baker has noticed there is a limited amount of sugar remaining (10 cups to be exact).

Given the limited time, the baker can use the sugar to bake pies or brownies, but not both.

Option A: to bake one pie, requires 1 cup of sugar and generates profit of $3 per pie.

Option B: to bake one dozen brownies, requires 2 cups of sugar and generates a profit of $4.00 per dozen.

Please bold or highlight your answer.

1. Determine which option you would choose, and explain why. (2 points)

Please bold or highlight your answer.