In the Kingdom of Bristol they can produce Orange Road Cones and Christmas Bells based on the following schedule:
In the Kingdom of Bristol they can produce Orange Road Cones and Christmas Bells based on the following schedule:
| Cones Bells | Cones Bells | Cones Bells | ||
| 0 550 | 170 450 | 260 190 | ||
| 50 540 | 200 400 | 270 100 | ||
| 95 520 | 225 340 | 275 0 | ||
| 135 490 | 245 270 |
a) Find the opportunity cost of producing an additional Cone if the economy is currently producing 135 cones, 225 cones and 260 cones. Explain why the trend in these costs makes sense. (1 point0
b) Assume that the PPF is graphed so that Bells are on the horizontal axis. Find the slope of the PPF between 270 and 340 bells (you don’t need to draw the PPF to do this but it’s ok if you do) and explain why this number is related to one of your answers in (a). (1 point)
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