High School

Amanda can make either "120 bottles of wine and 0 boxes of chocolates" or "0 bottles of wine and 960 boxes of chocolates," or a combination of wine and chocolates. Amanda’s Production Possibility Frontier (PPF) satisfies the property of constant opportunity costs.

**PART I**

a. Draw Amanda's PPF.

b. Find Amanda's opportunity cost of a bottle of wine in terms of box(es) of chocolates.

**PART II**

Suppose Amanda takes a course called WINE 103. After the semester is over, she realizes that she can now make either "288 bottles of wine and 0 boxes of chocolates" or "0 bottles of wine and 960 boxes of chocolates," or a combination of wine and chocolates. Find Amanda's new opportunity cost of a box of chocolate in terms of bottle(s) of wine.

Answer :

PART I:

a. Amanda's PPF: Straight line connecting (120, 0) and (0, 960).

b. Opportunity cost of a bottle of wine: -8 chocolates.

PART II:

Amanda's new PPF: Straight line connecting (288, 0) and (0, 960).

New opportunity cost of a box of chocolate: Approximately -3.33 bottles of wine.

PART I:

a. To draw Amanda's Production Possibility Frontier (PPF), we can plot the different combinations of wine and chocolates she can produce.

Let's use the following points:

  • Point A: 120 bottles of wine and 0 boxes of chocolates
  • Point B: 0 bottles of wine and 960 boxes of chocolates

The PPF will be a straight line connecting these two points since Amanda's PPF satisfies the property of constant opportunity costs.

The graph should have wine on the x-axis and chocolates on the y-axis.

```

Chocolates

|

960 | B

|

|

| PPF

|

|

|

|________ A

Wine

```

b. The opportunity cost of a bottle of wine in terms of box(es) of chocolates can be calculated by finding the slope of the PPF.

Opportunity cost = Change in chocolates / Change in wine

Using points A and B:

Change in chocolates = 960 - 0 = 960

Change in wine = 0 - 120 = -120 (negative change since it's decreasing)

Opportunity cost = 960 / -120 = -8

Therefore, Amanda's opportunity cost of a bottle of wine in terms of box(es) of chocolates is -8.

PART II:

After taking the WINE 103 course, Amanda's production possibilities change.

Let's use the following points:

  • Point C: 288 bottles of wine and 0 boxes of chocolates
  • Point D: 0 bottles of wine and 960 boxes of chocolates

To find Amanda's new opportunity cost of a box of chocolate in terms of bottle(s) of wine, we can calculate the slope of the new PPF.

The graph should have wine on the x-axis and chocolates on the y-axis.

```

Chocolates

|

960 | D

|

| New PPF

|

|

|

|________ C

Wine

```

Using points C and D:

Change in chocolates = 960 - 0 = 960

Change in wine = 0 - 288 = -288 (negative change since it's decreasing)

New opportunity cost = 960 / -288 = -3.33 (rounded to two decimal places)

Therefore, Amanda's new opportunity cost of a box of chocolate in terms of bottle(s) of wine is approximately -3.33.

To learn more about Production Possibility Frontier (PPF), Visit:

https://brainly.com/question/32941822

#SPJ11

Other Questions