suppose that taylor swift can do one of two tasks: she can record new songs or she can perform concerts. the…
suppose that taylor swift can do one of two tasks: she can record new songs or she can perform concerts. the figure shows her production possibilities frontier. use the graph below to answer the following question. the opportunity cost for taylor swift to record one song is concerts.
Answer
Explanation:
Step1: Recall opportunity - cost formula
Opportunity cost is the slope of the production - possibilities frontier (PPF). For a linear PPF, the slope is calculated as $\Delta y/\Delta x$.
Step2: Identify relevant points on PPF
Take two points on the PPF, say (0, 30) and (10, 0). Here, the x - axis represents the quantity of new songs recorded and the y - axis represents the quantity of concerts performed.
Step3: Calculate the slope
The slope $m=\frac{\Delta\text{Concerts}}{\Delta\text{Songs}}=\frac{0 - 30}{10-0}=\frac{- 30}{10}=- 3$. The absolute value of the slope gives the opportunity cost.
Answer:
3