Suppose That,during an Afternoon at Your Favorite Ski Resort,you Could

question 74

Essay

Suppose that,during an afternoon at your favorite ski resort,you could either make additional runs down the slopes or produce and sip hot chocolate by the fire in the lodge.Draw a production possibilities frontier (PPF)that describes your production trade-offs between runs skied (by riding the chairlift to the top and skiing down the slope)versus cups of hot chocolate produced and sipped.Your production of each of these goods is subject to a constant trade-off,so be sure that in your graph,the opportunity cost of one activity in terms of the other is the same at any point on the PPF.
Now suppose that a new superfast ski lift reduces the time it takes to get to the top of the mountain.Show,on the same graph,how this changes the PPF.

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Definitions:

Variable Input

Inputs or resources whose quantity can be changed in the short term to adjust the level of production, such as labor or raw materials.

Labor Market

The marketplace in which employers find workers and workers find jobs, characterized by the demand and supply of labor.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a factor of production, holding other factors constant.

Worker

An individual employed to perform tasks or services in exchange for compensation, such as wages or salaries.