Questions: ASSESS Chapter 8 Quiz Question 5 of 5 The figure at right shows a production possibilities curve (PPC) for Joe. He can spend his time making pizzas or chocolate cakes. Using the information in the figure, calculate Joe's opportunity cost of producing one pizza and his opportunity cost of producing one chocolate cake. Remember that the opportunity cost is how much of one good must be given up to produce one more unit of the other good. Joe's opportunity cost of producing one pizza is chocolate cake(s). (Round your response to one decimal place.) Joe's opportunity cost of producing one chocolate cake is pizza(s). (Round your response to one decimal place.) Joe's friend Samantha also makes pizzas and chocolate cakes. The figure at right shows the PPC for Samantha. Using the information in the figure, calculate Samantha's opportunity cost of producing one pizza and her opportunity cost of producing one chocolate cake. Samantha's opportunity cost of producing one pizza is chocolate cake(s). (Round your response to one decimal place.) Samantha's opportunity cost of producing one chocolate cake is pizza(s). (Round your response to one decimal place.) Samantha's little brother Rahul is also able to make pizzas or chocolate cakes, and he is equally good at each. His opportunity cost of producing either pizza or cake is one unit of the other good.

ASSESS Chapter 8 Quiz Question 5 of 5 The figure at right shows a production possibilities curve (PPC) for Joe. He can spend his time making pizzas or chocolate cakes. Using the information in the figure, calculate Joe's opportunity cost of producing one pizza and his opportunity cost of producing one chocolate cake. Remember that the opportunity cost is how much of one good must be given up to produce one more unit of the other good. Joe's opportunity cost of producing one pizza is chocolate cake(s). (Round your response to one decimal place.) Joe's opportunity cost of producing one chocolate cake is pizza(s). (Round your response to one decimal place.) Joe's friend Samantha also makes pizzas and chocolate cakes. The figure at right shows the PPC for Samantha. Using the information in the figure, calculate Samantha's opportunity cost of producing one pizza and her opportunity cost of producing one chocolate cake. Samantha's opportunity cost of producing one pizza is chocolate cake(s). (Round your response to one decimal place.) Samantha's opportunity cost of producing one chocolate cake is pizza(s). (Round your response to one decimal place.) Samantha's little brother Rahul is also able to make pizzas or chocolate cakes, and he is equally good at each. His opportunity cost of producing either pizza or cake is one unit of the other good.
Transcript text: ASSESS Chapter 8 Quiz Question 5 of 5 The figure at right shows a production possibilities curve (PPC) for Joe. He can spend his time making pizzas or chocolate cakes. Using the information in the figure, calculate Joe's opportunity cost of producing one pizza and his opportunity cost of producing one chocolate cake. Remember that the opportunity cost is how much of one good must be given up to produce one more unit of the other good. Joe's opportunity cost of producing one pizza is $\square$ chocolate cake(s). (Round your response to one decimal place.) Joe's opportunity cost of producing one chocolate cake is $\square$ pizza(s). (Round your response to one decimal place.) Joe's friend Samantha also makes pizzas and chocolate cakes. The figure at right shows the PPC for Samantha. Using the information in the figure, calculate Samantha's opportunity cost of producing one pizza and her opportunity cost of producing one chocolate cake. Samantha's opportunity cost of producing one pizza is $\square$ chocolate cake(s). (Round your response to one decimal place.) Samantha's opportunity cost of producing one chocolate cake is $\square$ pizza(s). (Round your response to one decimal place.) Samantha's little brother Rahul is also able to make pizzas or chocolate cakes, and he is equally good at each. His opportunity cost of producing either pizza or cake is one unit of the other good.
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Solution

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Solution Steps

Step 1: Determine Joe's Opportunity Cost of Producing One Pizza

Joe's PPC shows that he can produce either 45 pizzas or 45 cakes per day. The opportunity cost of producing one pizza is the number of cakes he forgoes to produce one pizza.

\[ \text{Opportunity cost of 1 pizza} = \frac{\text{Maximum cakes}}{\text{Maximum pizzas}} = \frac{45}{45} = 1 \text{ cake} \]

Step 2: Determine Joe's Opportunity Cost of Producing One Chocolate Cake

Similarly, the opportunity cost of producing one chocolate cake is the number of pizzas he forgoes to produce one cake.

\[ \text{Opportunity cost of 1 cake} = \frac{\text{Maximum pizzas}}{\text{Maximum cakes}} = \frac{45}{45} = 1 \text{ pizza} \]

Step 3: Determine Samantha's Opportunity Cost of Producing One Pizza

Samantha's PPC shows that she can produce either 30 pizzas or 45 cakes per day. The opportunity cost of producing one pizza is the number of cakes she forgoes to produce one pizza.

\[ \text{Opportunity cost of 1 pizza} = \frac{\text{Maximum cakes}}{\text{Maximum pizzas}} = \frac{45}{30} = 1.5 \text{ cakes} \]

Final Answer

  • Joe's opportunity cost of producing one pizza is 1.0 chocolate cake.
  • Joe's opportunity cost of producing one chocolate cake is 1.0 pizza.
  • Samantha's opportunity cost of producing one pizza is 1.5 chocolate cakes.
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