PPF Practice Use the PPF-A and PPF-B to answer the following:
a. On PPF-A, what is the opportunity cost from point a to b in terms of whipping cream?
What about moving from b to c? What generalizations can you make? (___/2.5)
b. On PPF-B, what is the opportunity cost from point a to b in terms of guns? What is the
PER UNIT OPPORTUNITY COST from moving from c to e? (12.5)
Which PPF shows increasing opportunity costs? Use numerical examples to explain why?
(2.5)
d. Fully explain three specific situations that would shift PPF-B outward. Draw and label
these changes on three separate graphs./2.5)
C
(A)
(B)
Guns
Whipping cream
a
b
2245
С
23
25 a
d
20
20
b
8
15
15
d
10
10
h
5
5
f
0
0
3
4
4
BUTTER
Butter