Thyrell Smith & Ryan Thomas

Macroeconomics Section-B
Dennis Steele
8/27/17

a. Smithomas
b. Tortilla Chips and Coffee
c.
Combination Chips Coffee
A 20 0
B 15 5
C 10 10
D 5 15
E 0 20
d.

Smithomas- Production Possibilities Frontier 1

25
Chips (in thousands of pounds)

20

15

10

0
0 5 10 15 20 25

Coffee (in thousands of pounds)

e. We are always creating the same amount of product (20 thousand pounds) so our
opportunity costs are constant. Whether were producing 20 thousand pounds of chips or coffee or
any of the points in between.
f.
Combination Coffee Chips
A 0 20
B 1 18
C 2 16
D 3 8
E 4 0
 g.

Smithomas- Production Possibilities Frontier 2

25
Chips (in thousands of pounds)

20

15 F

10 G

0
0 1 2 3 4 5
Coffee (in thousands of pounds)

h. As more of a good is produced, the opportunity cost of producing that good

is increased. Therefore, the line is bowed-outward non-linearly.
i. The more you produce something the less utility you will start getting out of
each unit produced. So, while it may not get more expensive to produce
something you will not get the same utility from each subsequent unit
produced.
j-k. ( See graph g )
F 3 15
G 2 10

l. Point G is attainable because it is within the PPF although it is not the most
efficient.
m. Point F is unattainable because its beyond our ability to produce.