Question

File Edit View History 100% ECON 102,- Not- Econ 102-0 102 pdf | Po.. Champedder Inc. produces only wine and cheese. Below are q of the factors of production are fully utilized. Further, assume the company cannot add factors of production nor will there be any sort of technological improvement unless otherwise stated. Combination Wine (gallons Cheese (pounds) 100 85 20 Draw the following PPF. Calculate th produc C to combination D Suppose that a new fermentation decreases the amount of time it takes to produce a gallon of wine. Draw a new PPF. (Note: You do not need to use any exact values for the new PPF. 1. 2. e cost of moving from production combination A to combination B. Then calculate the cost of moving tion from combination 8 to combination C. Finally,calculate the cost of moving production from combination 3.
1 to 3 ASAP

Answer 1

On the x axis we have wine per gallon while on y axis we have cheese.

2. Given,

	Wine	Cheese
A	100	0
B	85	20
C	55	40
D	0	60

When we shift from A to B

15 gallons of wine has to be sacrificed for 20 pounds of cheese

15 gallons of wine = 20 pounds of cheese.

Cost of moving

1 pound of cheese = 0.75 gallons of wine

1 gallon of wine = 1.33 pounds of cheese.

When shift from B to C

So, 30 units of wine has to be sacrificed for 20 units of cheese

30 units of wine = 20 pounds of cheese

Cost of moving

1 pound of cheese = 1.5 gallons of wine

1 gallon of wine = 0.66 pounds of cheese

Similarly, for C to D

55 gallons of wine = 20 pound of cheese

Cost of moving

1 pound of cheese = 2.75 gallons of wine

1 gallon of wine = 0.36 pounds of cheese.

For 3 rd question refer the attached picture. New PPF was constructed by increasing the production of wine by 20%.

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