Budget Line And Production-Possibilities Curve Worksheet Page 2
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1
2b)
At each point, state the opportunity cost of producing one more yacht and the
opportunity cost of producing one more sailboat.
c)
Can Vandelay Industries produce:
i)
3 yachts and 5 sailboats?
ii)
2 yachts and 12 sailboats?
3)
Walkerco produces bags of ravioli and tortellini. Its production alternatives are shown by the
following chart:
A
B
C
D
E
Type of Product
18
15
11
6
0
Bags of Tortellini
0
2
4
6
8
Bags of Ravioli
a)
Draw the production-possibilities curve for Walkerco.
b)
At each point, state the opportunity cost of producing one more bag of tortellini and the
opportunity cost of producing one more bag of ravioli.
c)
Can Walkerco produce:
i)
3 bags of ravioli and 9 bags of tortellini?
ii)
7 bags of ravioli and 7 bags of tortellini?
4)
Why does a budget have a linear relationship, while a production-possibilities model is curved?
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