The Table Above Lists Seven Points on the Production Possibilities

question 212

Essay

The table above lists seven points on the production possibilities frontier for pizza and CDs. Graph the PPF. What is the opportunity cost of producing the first four pizzas? What is the opportunity cost of producing the 10th pizza. What is the opportunity cost of producing the first 12 CDs? What is the opportunity cost of producing the 26th CD? $$\begin{array} { | l | l | l | l | } \hline \begin{array} { l } \text { Production } \\\text { point }\end{array} & \begin{array} { l } \text { Milk } \\\text { (gallons) }\end{array} && \begin{array} { l } \text { Shirts } \\\text { (number) }\end{array} \\\hline A & 0 & \text { and } & 100 \\\hline B & 2 & \text { and } & 90 \\\hline C & 4 & \text { and } & 70 \\\hline D & 6 & \text { and } & 40 \\\hline E & 8 & \text { and } & 0 \\\hline\end{array}$$

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Definitions:

Main-Purpose Rule

A legal principle holding that if the main purpose of a guarantor's promise to pay another's debt is to serve the guarantor's own interests, the promise does not need to be in writing to be enforceable.

Secondary Obligation

An obligation that arises only after a primary obligation has not been fulfilled, often seen in guarantor or surety arrangements.

Statute of Frauds

A legal principle that requires certain contracts to be in writing and signed by the parties to be enforceable.

Prenuptial Agreements

Agreements made by a couple before they marry concerning the ownership of their respective assets should the marriage fail.