Cecil Gorman | ECON 150

P ro d u cti o n P o s s i b i l i ty F ro n ti e r Production Possibilities

250 Frontier
200

150
Aircraft

100

50

0
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5
Pizza

Is the production combination of 120 pizzas and 110 airplanes inside, outside, or on the
country’s PPF and is this production combination attainable? 
Is the production combination of 100 pizzas and 100 airplanes inside, outside, or on the
country’s PPF and is this production combination attainable? 
If the country is currently producing 80 pizzas and 160 airplanes and it increases its production
of pizzas to 120, what is the opportunity cost of an additional pizza? 
Does this country face constant, increasing, or decreasing opportunity costs? Explain why. 

Producing 120 Pizza’s and 100 Aircraft is possible, but the additional 10 aircraft are outside this
countries Production Possibility Frontier. They could, for example produce 100 pizzas and 100
Aircraft, although they would be inefficient in pizza production.

Moving from B to C would cost 1.5 Aircraft for every pizza produced.
This country faces an increasing opportunity cost. As with each movement from A – D the
Opportunity cost increases by .5, 1.5 and finally 5 Aircraft for every additional pizza made at
each stage.