Question: fundamentals inclass worksheet 2 this question examines the production possibilities...
Question details
FUNDAMENTALS
IN-CLASS WORKSHEET 2
This question examines the production possibilities of an individual, Nicolas. You will construct the production possibilities frontier (PPF) for Nicolas and identify his opportunity cost of producing different goods.
Nicolas can use his limited resources to produce only rings and necklaces. Below, you are provided with feasible combinations of rings and necklaces that Nicolas can produce, and that employ all of his productive resources.
Rings |
Necklaces |
0 |
8 |
3 |
6 |
6 |
4 |
9 |
2 |
12 |
0 |
Task 1: In the graph below, construct Nicolas’ PPF. Be sure to place rings on the horizontal axis and necklaces on the vertical axis.
Task 2: What is the opportunity cost of producing an additional ring for Nicolas? What is the opportunity cost of producing an additional necklace?