Figure 310 Alice and Bettys Production Possibilities in one

Figure 3-10
Alice and Betty’s Production Possibilities in one 8-hour day.

Refer to Figure 3-10. Both Alice and Betty

Alice’s Production Possibilities Frontier

Betty’s Production Possibilities Frontier

emonade 500 450 400 350 300 250 200A 150 100 50 50 100 150 200 250 300 350 400 pizzas

Solution

Production possiblity curve refers to the representation of the maximum output possiblities of a firm given all sets of inputs.

Here PPC is a downword sloping curve which shows that for increasing the production of one good quantity of other good must be reduced due to restricted resources.

PPC is a straight line which shows that both is having a constant trade off between producing pizza and lemonade