Question

FUNDAMENTALS

IN-CLASS WORKSHEET 1

This question examines the production possibilities of a small country, Millsville. You will construct the production possibilities frontier (PPF) for Millsville and identify its opportunity cost of producing different goods.

Millsville can use its limited resources to produce only applesauce and apple juice. Below, you are provided with feasible combinations of applesauce and apple juice that Millsville can produce, and that employ all of Millsville’s productive resources.

Applesauce (jars)	Apple Juice (bottles)
5	0
4	2
3	4
2	6
1	8
0	10

Task 1: In the graph below, construct Millsville’s PPF. Be sure to place jars of applesauce on the horizontal axis and bottles of apple juice on the vertical axis.

Task 2: What is the opportunity cost of an additional jar of applesauce in Millsville? What is the opportunity cost of an additional bottle of apple juice?

Answer 1

TasR -1 Applesauce ane) PP F 3 2. 4 lo Apple jui ce TeuR-2 (bottlai) one aaditosal jos censi da, Cio-a bot ot apple juibotHe) 2