ECONOMICS 1010 A
Summer Session I, 2007
FIRST EXCEL EXERCISE
Production Possibilities Curve
This exercise has you set up a Prodction Possibilities Curve for a whole economy and answer some
questions about it. This first exercise is very simple. I’m assigning it mainly to get you used to EXCEL
and it’s capabilities, and to the nature of these exercises.
1. Use the first row for labels. In A1 type “FISH-1”; in B1 type”CORN-1”; in C1 type “FISH-2”.
2. First, initial fish numbers. In A2 type “0”. In A3 type “=A2+10”. Copy A3 and Paste it to A4:A17. A17
should be 150.
3. Next, initial corn. In B2 type “300”. In B3 type “=B2-A3*.25”. Copy B3 and Paste it to B4:B17. B17
should be 0 (zero).
4. Now Fish after a 20% productivity increase. In C2 type “=A2*1.2”. Copy C2 and Paste it to C3:C17.
C32 should be 180.
5. Create two graphs, all on the same Chart. For the first, (PPC-1) use FISH-1 – the values in A2:A17 –
as the X-axis, and CORN-1 – the values in B2:B17 –as the Y-axis. For the second, (PPC-2) use FISH2 – the values in C2:C17 – as the X-axis, and continue to use CORN-1 – the values in B2:B17 –as the
Y-axis. Note: you can name the graphs as you create them – the name box is just above the X-values
box.
6. Print the spreadsheet and the Chart.
7. Now use the values in the three columns, and your two graphs, to answer the questions on the answer
sheet.
ECONOMICS 1010 A
SSI, 2007
FIRST EXCEL EXERCISE ANSWER SHEET
You are to turn in this sheet, with the numbers you put in by hand, your spreadsheet, and your chart with
the three graphs on it. These are due at classtime Tuesday, May 15.
NAME_________________________________
STUDENT NUMBER_____________________
1. The situation is that represented by PPC-1.
a) The opportunity cost of:
Increasing Fish from 20 to 30
Increasing Fish from 80 to 90
Increasing Fish from 120 to 130
is in total?
and is per unit of Fish?
__________
__________
__________
__________
__________
__________
b) What does the above tell you about the relation between opportunity cost and the level of
production of Fish?
c) What is true if 70 Fish and 200 Corn are being produced? (Draw this point on your Chart and label
it “1-c”.)
d) What is true of the point: 50 Fish and 275 Corn? (Draw this point on your Chart and label it “1-d”.)
2. The situation is that represented by PPC-2. Productivity in the Fish industry has increased by 20%,
but there has been no increase in productivity in the Corn industry.
a) The opportunity cost of:
Increasing Fish from 24 to 36
Increasing Fish from 84 to 96
Increasing Fish from 120 to 132
is in total?
and is per unit of Fish?
__________
__________
__________
__________
__________
__________
b) What do your answers to 2-a compared to 1-a the above tell you about how opportunity cost of
Fish changes when productivity in the Fish industry increases?
c) Assume that before the productivity increase the economy was producing 60 Fish and 247.5 Corn.
Using your Chart as a tool, show that, and discuss why, if the people in this economy choose to
take the increase in productivity by increasing production and consumption of both Fish and Corn,
resources must be shifted out of Fish production and into Corn production.