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Chapter 2. Production Possibilities Frontier (PPF) Framework: Pre-Class & In-Class Activities Packet Name/I.D. Number: Section: Date: Part 4. Economic Equations and Graphs Point in Coffee

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Chapter 2. Production Possibilities Frontier (PPF) Framework: Pre-Class & In-Class Activities Packet Name/I.D. Number: Section: Date: Part 4. Economic Equations and Graphs Point in Coffee Combination Books Shirts Part (b) Combination Cell Phones maker Point In AWN-O monos O-NWA MOOD monas (a) (a) 3 B Cel Phones O -NOADONGCO Books 2 C Shirts (b) Coffee Makers (b ) 1. In the above PPF graphs which of the points on the two PPF graphs represent production efficiency points? Why? 2. What is gained by choosing to produce at point C, instead of at point B on graph b (the 2nd graph)? What is the opportunity cost of choosing to produce at point C, instead of at point B on graph b (the 2nd graph)? 3. Calculate the slopes between points B & C and between C & D on Graph A; Calculate the slopes between points B & C and C & D on Graph B? 4. What did you conclude between the two PPF graphs based on the results of the slopes? 5. In the above PPF graphs which one represent constant opportunity costs and which one represents increasing opportunity costs? Why? 6. In the following PPF graphs Which one depicts a technological breakthrough in the production of civilian goods only and Which one depicts expansion of resources quantitatively and qualitatively in the production of both civilian goods and military goods? Explain. Miltary Goods Military Goods PPF PPF- Civilian Goods Civilian Goods 5

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