Figure 3-6
Maxine's Production Possibilities Frontier
Daisy's Production Possibilities Frontier
-Refer to Figure 3-6.If the production possibilities frontier shown for Maxine is for 3 hours of work,then how long does it take Maxine to make one pie?
A)1/4 hour
B)1/3 hour
C)3 hours
D)4 hours

Question

Figure 3-6
Maxine's Production Possibilities Frontier
Daisy's Production Possibilities Frontier  
-Refer to Figure 3-6.If the production possibilities frontier shown for Maxine is for 3 hours of work,then how long does it take Maxine to make one pie?
A)1/4 hour 
B)1/3 hour 
C)3 hours 
D)4 hours

Quizplus · Accepted Answer

If the production possibilities frontier shown for Maxine is for 3 hours of work, then the slope of the frontier represents the opportunity cost of one good in terms of the other. The slope of the frontier is the change in apple production divided by the change in pie production. From the graph, we can see that Maxine can produce either 4 pies or 3 apples in 3 hours of work. Therefore, the opportunity cost of producing one pie is the loss of 3/4 (or 0.75) of an apple. Mathematically, the slope of the frontier is -0.75 (the negative sign indicates that there is a trade-off between apples and pies). Thus, the time required to produce one pie is the inverse of the slope, which is -4/3 hours or 1/3 of an hour. Therefore, it takes Maxine 1/4 of an hour or 15 minutes to make one pie.

Figure 3-6 Maxine's Production Possibilities Frontier