Figure 3 below describes a Production Possibilities Frontier (PPF) for Ed as he engages in two activities over 20 hours: writing poems and reading books.

Refer to Figure 3 to answer the following questions:

1. Assuming this PPF shows Ed's possible production over 20 hours, how many hours does it take Ed to read a book?
- Only enter a number into the answer box.

2. What is Ed's opportunity cost of writing a poem?
- Choose the correct value and units from the drop-down menus provided.

3. Imagine that Ed tells you he has read 2 books and written 8 poems in 20 hours. What would you say about that, given what you see in Figure 3?
- Great. That point is consistent with Figure 3.
- Ed isn't using all of his time efficiently.
- If that is Ed's true PPF, it is impossible for him to do that much in 20 hours.

Question

11-11-2024
Business

High School

Figure 3 below describes a Production Possibilities Frontier (PPF) for Ed as he engages in two activities over 20 hours: writing poems and reading books.

Refer to Figure 3 to answer the following questions:

1. Assuming this PPF shows Ed's possible production over 20 hours, how many hours does it take Ed to read a book?
- Only enter a number into the answer box.

2. What is Ed's opportunity cost of writing a poem?
- Choose the correct value and units from the drop-down menus provided.

3. Imagine that Ed tells you he has read 2 books and written 8 poems in 20 hours. What would you say about that, given what you see in Figure 3?
- Great. That point is consistent with Figure 3.
- Ed isn't using all of his time efficiently.
- If that is Ed's true PPF, it is impossible for him to do that much in 20 hours.

Answer :

Final answer:

Ed takes 10 hours to read a book. The opportunity cost of writing a poem is higher at the beginning and decreases as more poems are produced. If Ed has read 2 books and written 8 poems in 20 hours, it is consistent with the PPF, but he is not using all of his time efficiently.

Explanation:

The Productive Possibilities Frontier (PPF) is a graphical representation of the maximum output an individual or an economy can produce given limited resources and technology. In this case, the PPF for Ed shows the trade-off between writing poems and reading books.

The PPF in Figure 3 represents Ed's possible production over 20 hours. The slope of the PPF represents the opportunity cost of producing one good in terms of the other. To find the number of hours it takes Ed to read a book, we can look at the PPF. The x-axis represents the number of hours spent on writing poems, and the y-axis represents the number of hours spent on reading books. We can see that the PPF intersects the y-axis at a point where the number of hours spent on reading books is 10. Therefore, it takes Ed 10 hours to read a book.

The opportunity cost of writing a poem can be determined by looking at the slope of the PPF. The slope represents the rate at which Ed has to give up reading books to produce one more poem. From the PPF, we can see that the slope is steeper at the beginning, indicating a higher opportunity cost of writing poems. As we move along the PPF, the slope becomes less steep, indicating a lower opportunity cost. Therefore, the opportunity cost of writing a poem is higher at the beginning and decreases as more poems are produced.

Based on the information provided in Figure 3, if Ed tells us that he has read 2 books and written 8 poems in 20 hours, we can say that it is consistent with the PPF. The point (8, 2) lies on the PPF, indicating that it is a possible combination of production for Ed. However, the PPF also shows that Ed is not using all of his time efficiently. He could potentially produce more books or poems by reallocating his time. Therefore, if that is Ed's true PPF, it is impossible for him to produce that much in 20 hours.

Learn more about understanding ed's productive possibilities frontier (ppf) here:

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