CHAPTER 2
PRODUCTION POSSIBILITIES FRONTIER
SHOES AND BICYCLES PPF
Name:__________________________________Block:_________
Why can’t you always get what you want?
The production possibilities frontier below represents a small country that produces only shoes and bicycles.
Study the PPF, and answer the questions.
1. Suppose the country produces 3,000 bicycles. Estimate the maximum number of pairs of shoes it can
produce with current resources.
2. Estimate the opportunity cost of increasing shoe production from Point A by 10,000 pairs. Estimate the
opportunity cost of increasing shoe production from Point B by 10,000 pairs. Compare the opportunity
costs, and explain why they might differ.
3. Government data show the country is currently producing at the level of 2,000 bicycles and 30,000 pairs of
shoes. Mark that point on the graph and label it “C.” Evaluate the efficiency of the economy at this point.
4. Suppose you are an adviser for economic development. Your nation is currently employing all of its labor
and land resources. The government wants to increase production to 4,000 bicycles and 40,000 pairs of
shoes per year. Mark that point on the graph and label it D. Outline your advice. Can the government do
what it wants? If so, how?