Unformatted text preview: Oaﬂ Practice Problems: Draw a production possibilities frontier for guns and butter. Suppose that
both of these goods are subject to increasing marginal opportunity costs in
production, and be sure that your graph reﬂects this fact. Now suppose that a
new and innovative technology enhances the production butter, but does not affect the production of guns. Show how this new innovation changes the ppf. O. bailey Suppose the first three columns in the following table illustrate the maximum
quantities of smoothies or salads that two workers could make in a day’s time.
Fill in the rest of the table and answer the questions below. # Salads # Smoothies Opportunity Opportunity
4pm day per day Cost of Salad Cots/Lomeoolthie
Turk 45 60 W3 smwll‘w (31% 9&1 )
3"; ﬁx it} ...........
Dorian 40 50 5/4 §M05HMO> /5 said 9.. Who has a comparative advantage in producing salads? ’DO“ “A
Who has a comparative advantage in producing smoothies? ,Tuv
Who has an absolute advantage in producing salads? , ‘T‘LV‘L Who has an absolute advantage in producing smoothies? g‘TM Wk, 12 ...
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- Spring '07