Greta starts using a new baking technique, and she can now do twice as much of everything. In a single day Greta can now make 10 cakes or 8 pies, rather than the 5 cakes and 4 pies she could previously bake. Greta's production possibility frontier has _____, but her opportunity costs of making pies _____.
A)shifted right; are unchanged
B)shifted right; have decreased
C)not changed; have increased
D)not changed; have decreased

Question

Quizplus · Accepted Answer

Greta's production possibility frontier has shifted right because she can now produce more of both cakes and pies. However, the opportunity costs of making pies remain unchanged because she still has to give up making some cakes in order to make pies.

Greta Starts Using a New Baking Technique, and She Can