4.

Solation8 A teehological brreakthrto uYh het

only allpss +the prodactiom of Dnl One

dodto Tise wO&ld mean & shift in the PPF

ourte-3 dep ietsS

Avmo
Avmongthe igares , onle
im the prtoont0n
tednsloorica brreak thtrLOUh

ot ond x TG76
io

199
5.Soluton
PPF
t,h e
AS a conseoyuence of aT

eSooHTCeS
S kel to shft msartd &S

wilbecome SarnceT.

Aong e ttare ,

raph -2 depicts
chroye in he PPF

|4hat 'h kel

Y-66u ho 20D
CDnseoULnLe at Se, Soge

fo-
 Cuuns
6Solaon
pF
Tf, PPF2 is+e releveon q r ;
+hen on y Ay Pointn
0m/insíde pPFs
PPF Are attainable
PPE
the
above,/butsi de the
Ames
Hngs 1001nt
nartteimalble, 0 PPF
PPF aTre

ThertetorLe poit 3,1, avd a r e nattamable.

T Solutiom
oi
Tf, 1PPF is he relevont PPF,
tkes
he ny poimt on the PpF ALe efficiert,
fhe maximOn
We knoto
kot rudction efficiec mem

ntilizotion ot F0P/TeSources.

Theze orc, potnt A,13. and C eprresents

prroductive afíciency
8.Solution

Tine's PF

Comb ime tions Crcood-x Cood

100

b 25
O 50

Davi D's PPF

Combinotio &oodY
50 O

25 40

Comyaarative Advontoe mdicotes a t 0

im thi COm Toduke ood at
someone a oOd
louer oPportnitea coS thom other (s).

Tins opporztits cost (05 ood-) is locuert t

Davw's opporttnittg cost (OGS 1 . Crro th eretort
Tina nS the comparrative advantage ohen
przoducg GDOd-X
Similartly, David's oppor tunity cost is lotuer
Timos nen roducmy o00-YTerretor
David hay the CompATTAAiVe acvantaqpe
 aood-Y
For Tina,
The opportumity
cos+ o 100

producing 1
ait of

CDod-Xe-(25
=OS aood Y
The opporztton ity cdst of
SoC
przoduemg 1 n tt of
Ccood-T ( 100 -50
15
2 Cruood X 25

-Gad-
25 75
Tha's PPF

FOTT David,
The opporttuot c o o f Crood-Y

1 nt fF
Produc
Cood =0)
1.G Grood¥ 75

o t of
The opp ontum 50
uni of
Pr-Ddueir 1
ood-Y
25-oco)-X
2

0 625 ood X
15 100 o-X
50 75

Dsvid'S 10pF
9.Solud ion
Tna's PPE
COmbima ho»y Copd Crood-

b S0 25

So
David's F
Combinations
50 O
25 A0

Herte,
snen producmo
cmparzative advonture
Tna
iha has a

LSolsion - &]
rood-X
producma
odvamtaoge Lahen
Doid has cOmpaTaA Ive

ood-Y solusim-2

themoml. prtoduces
of
ASSum 1m,lbth advataog
Compartatie

the have
BOO thes
theu

rDDd- nd O cmts
Tina oLld prtodLee T00 nts of
04 0D-Y
80 Lnts of rood
-

Y m
David speld produce
RoodX
 Nouo, 1f thegs dechde to treoe

1 n t 04 bod-X for 1 w t ot Aood-t,

torz SOCood
hecLold ttrade 0 Crrood-X n d

Atter he treade ; T ma LSoulde t

COnSme 50 os X nS0 ood-. Comparmg

tiHh tshen She di dn'+ Specialize and
that
Lrade. She csS con mm 50 ood--K and 25odY

Tina is Letter fwher She åCpectalieS

nd tzades

Consme
Sinilarl. Davi d oeld Le able o
S0 ood-X md 50 do)-Y. Cowpor ina twat
toit ohen he tSh+Specializin©y. te

Const 2 5 Crood-X ndA0ood-

0od-F
Thus, Dovid is alo oetter 0ff cshen
he speciolizes nd Roda
o
,
12Solut1om
Cob imoin Cood-A Grod-3
20 O

15

e 20

The ehart i\lesAtodes a constot opporztumit

all
So it s nnecessafyto cadculee tor
Cot
e epmbinations,

cOSt 0f p r t o d u c i m a , a
he oPPortuitg

FrPot atob
1
2015) A 1A

coS+ of prodiNS
Te opporrteonit

t
1B Frco deimt
1A ( From poitbto a