ThirdClassPPFData

ThirdClassPPFData - OR H C = (1/2)Q C Q S = AMOUNT OF...

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DATA FOR PRODUCTION POSSIBILITY FRONTIERS (CLASS 2-A) YOU CAN MAKE CLAY POTS (One every 30 minutes) CAN DO SKETCHES (One every hour) HAVE SIX HOURS AVAILABLE MAX. NUMBER CLAY POTS = 12 (Spend all 6 hours making pots) MAX. NUMBER SKETCHES = 6 (Spend all 6 hours making sketches) OPPORTUNITY COST OF ONE MORE CLAY POT = THE NUMBER OF SKETCHES HAVE TO GIVE UP TO PRODUCE ONE MORE CLAY POT = 1/2 [1 CLAY POT REQUIRES 30 MINUTES, AND IN 30 MINUTES CAN MAKE ½ A SKETCH] OPPORTUNITY COST OF ONE MORE SKETCH = THE NUMBER OF CLAY POTS HAVE TO GIVE UP TO PRODUCE ONE MORE SKETCH = 2 [1 SKETCH REQUIRES 60 MINUTES, AND IN 60 MINUTES CAN MAKE 2 CLAY POTS] H C = HOURS SPENT ON CLAY POTS H S = HOURS SPENT ON SKETCHES H C + H S = TOTAL HOURS AVAILABLE = 6 Q C = AMOUNT OF CLAY POTS = 2 x H C [SINCE CAN PRODUCE 2 CLAY POTS EACH HOUR]
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Unformatted text preview: OR H C = (1/2)Q C Q S = AMOUNT OF SKETCHES = 1 x H S [SINCE CAN PRODUCE 1 SKETCH PER HOUR] OR H S = (1)Q S H C + H S = 6 (1/2)Q C + (1)Q S = 6 [YOUR PRODUCTION POSSIBILITY FRONTIER] KID SISTER ALSO HAS 6 HOURS, BUT CAN PRODUCE A CLAY POT EVERY HOUR, OR A SKETCH EVERY 90 MINUTES (1)Q C + (3/2)Q S = 6 [KID SISTER’S PRODUCTION POSSIBILITY FRONTIER] OPPORTUNITY COST OF CLAY POT = 2/3 SKETCH OPPORTUNITY COST OF SKETCH = 3/2 CLAY POTS COMPARING TWO OF YOU : SINCE 1/2 < 1, YOU HAVE ABSOLUTE ADV. IN PRODUCING CLAY POTS SINCE 1 < 3/2, YOU ALSO HAVE ABSOLUTE ADV. IN PRODUCING SKETCHES SINCE 1/2 < 2/3, YOU HAVE COMPARATIVE ADV. IN PRODUCING CLAY POTS SINCE 3/2 < 2, KID SISTER HAS COMPARATIVE ADV. IN PRODUCING SKETCHES...
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This note was uploaded on 01/21/2011 for the course ECON 252 taught by Professor Robertholand during the Spring '08 term at Purdue University.

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