227k views
0 votes
Use the PPF (Production Possibility Frontier) to answer the following questions. Suppose Daniel had originally expected to hire six new Resource Writers this year. After reviewing the applicant pool, he decides to hire 10 new Resource Writers instead. What is the opportunity cost of his decision (expressed in Flashcard Writers)?

a) 4 Flashcard Writers
b) 6 Flashcard Writers
c) 10 Flashcard Writers
d) 16 Flashcard Writers

1 Answer

6 votes

Final answer:

The opportunity cost of hiring additional Resource Writers in place of Flashcard Writers depends on the trade-off illustrated by the Production Possibility Frontier (PPF), which is not provided. Hence, the answer cannot be determined without the specific PPF curve detail.

Step-by-step explanation:

The concept of opportunity cost is central to understanding the Production Possibility Frontier (PPF), which graphically demonstrates the trade-offs between two options given limited resources. In the scenario provided, if Daniel has decided to hire 10 new Resource Writers instead of the 6 originally planned, the opportunity cost of his decision will depend on the trade-off ratio between hiring Resource Writers and Flashcard Writers. Without specific numbers provided by a PPF graph illustrating the exact trade-off between the two types of writers, the opportunity cost in terms of Flashcard Writers cannot be determined with the information given.

The PPF is a downward-sloping curve that shows the maximum possible production levels of two commodities that a business can achieve, given its resources. When resources are allocated to increase production of one good, there is a sacrifice in the production of the other good, which is the opportunity cost. If, for example, the slope of the PPF indicates a 1:1 trade-off, hiring 4 additional Resource Writers would mean forgoing the hiring of 4 Flashcard Writers, making option (a) the correct choice. However, a PPF is needed to give an exact answer.

User MotoxX
by
8.7k points