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Opportunity Cost and the Production Possibilities Curve

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The following are hypothetical points a student can earn in examinations on economics and biology if the student uses all available hours for study.

Economics Biology
100 40
80 60
60 80
40 100

Using this data, you need to plot the student's production possibilities curve

Now, answer the following questions:
?Does the Production Possibilities Curve (PPC) illustrate increasing or decreasing opportunity costs?
?What is the opportunity cost to this student of allocating enough additional study time on economics to move her grade from 80 to 100? Provide reasons for your answers.

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Solution Summary

The solution discusses opportunity cost and the production possibilities curve.

Solution Preview

See the attached file. To make a PPF, first create axis and decide what increments to use. In this case, each increment will represent 10 percentage points in grade. Biology in on the y axis and Economics on the x axis. There are straight lines until the grade ...

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