Q1 Caf Inc Producing Cars And Milk ✓ Solved

Q1 Caf Inc Is Producing Two Goods Cars And Milk The Following Tabl

Q1. CAF Inc. is producing two goods: cars and milk. The following table gives several points on its production possibility frontier. Cars (1000's/year) Milk (1000's of gallons/ year) a. Graph this on production possibility frontier. (1.5 Marks) b. Why is the production possibility frontier downward sloping? Be sure to explain economic intuition behind that fact. (3Marks) c. Suppose the firm is currently producing 2000 cars and 30,000 gallons of milk. What is the opportunity cost of producing additional 20,000 gallons of milk? (3Marks) d. Give an example of opportunity cost principle from everyday experiences of economic activities (1.5 Marks) Q2. A team consisting of three people working on a big project, which involves manual entry of data in a computer, with subsequent processing of these data and making a poster presentation. Naturally, each member of the team has different abilities in performing either task. Amna can make one poster or 400 data entries in a day. Hard-working Zeba can make two posters or 1200 data entries in a day. Artistic Ibraheem can make three posters or 900 entries in a day. a. Initially, the entire team (each of them having their own personal computer) starts with entering data. How many entries will be made in a day? (2Marks) b. As the time comes to start making posters, you decide to assign one member of the team to this task. Whom would you choose? Explain why? (2.5Marks) c. As you make this decision, what is the opportunity cost of each poster made? (1.5Marks) d. As there is less and fewer data remaining to be entered, another person can shift to making posters as well. Which of the remaining two members of the team will you choose this time? Explain your choice. As a result, what is the opportunity cost of each additional poster you will get? (2Marks) Q3. Is Economics a science? Why, or why not? As part of your response and explanation, include the definitions of "science" and "economics" as you understand them. (3Marks) Assessment Task No 3A Digital Poster Marking Rubric Group Member Names: Group Student ID’s: First name Criteria High Distinction 80% - 100% Distinction (70% - 79%) Credit (60% - 69%) Pass (50% - 59%) Fail (0% - 49%) Score Weight (Marks) 1. Poster Presentation Structure and Organisation Well organized Poster and coherent, topics are in logical sequence, includes clear Strategies. Organized poster and coherent, topics are in logical sequence, includes clear Strategies. Organized poster, some topics are out of logical order, Strategies generally clear Some organization of the topics, strategies are unclear Poster not organized, topics make no sense 3.. The quality and completeness of response to the Digital Marketing Strategies. (, Revenue Model Strategy, Target Market Strategy, Position Strategy & 7P.) Presents excellent Digital marketing strategies very thoroughly. Presents the Digital marketing strategies includes details that support the poster. Presents the essential information on Digital marketing strategies, includes some supporting details Includes most essential information on Digital marketing strategies, details are somewhat sketchy Lacks essential information on Digital marketing plan. . Visual design Excellent visuals, text is easy to read, colours enhance readability, graphics and special effects do not distract from understanding ideas Visually attractive, text is easy to read, colours enhance readability, graphics and special effects do not distract from understanding ideas Visually appealing, clean simple layout, text is easy to read, graphics enhance understanding of ideas Text is sometimes hard to read, sometimes graphics or special effects distract from understanding Text is very difficult to read, layout is cluttered and confusing 3.5 Late penalty Marks awarded 15 COMMENTS:

Sample Paper For Above instruction

Introduction

The concept of the Production Possibility Frontier (PPF) is fundamental in understanding the trade-offs faced by producers and the efficient allocation of resources. In this paper, we explore the PPF of Caf Inc., analyze the slope and shape of the frontier, calculate opportunity costs, and relate these concepts to real-world economic decision-making. Additionally, the principles of opportunity cost are illustrated through practical examples.

Graphing the Production Possibility Frontier

The provided data points of Caf Inc. allow us to plot the PPF, which visually demonstrates the maximum attainable combinations of cars and milk given resource constraints. For example, data points such as producing 2000 cars with a certain amount of milk, or producing specific quantities of both goods, help in constructing the curve. The graph typically has cars on the horizontal axis and milk on the vertical axis, illustrating all possible combinations that the firm can produce efficiently.

Why is the Production Possibility Frontier Downward Sloping?

The downward slope of the PPF is primarily due to the law of increasing opportunity costs. As Caf Inc. shifts resources from producing one good to another, it must sacrifice increasing amounts of the first good to produce additional units of the second. The economic intuition behind this is that resources are not perfectly adaptable for producing both goods; hence, reallocating resources results in a trade-off. For instance, resources best suited for car manufacturing may not be efficient for milk production, causing the opportunity cost of milk to increase as more is produced.

Opportunity Cost of Producing Additional Gallons of Milk

Assuming Caf Inc. is currently producing 2000 cars and 30,000 gallons of milk, we calculate the opportunity cost of producing an additional 20,000 gallons of milk. Based on the data points provided, we assess how many cars need to be forgone to increase milk production by this amount. Typically, producing more milk requires reallocating resources away from car production, and the opportunity cost is measured in the number of cars sacrificed. The precise calculation involves comparing the original and new production points on the PPF.

Opportunity Cost in Everyday Life

An everyday example of opportunity cost is choosing between studying and leisure. If a student spends three hours watching a movie, the opportunity cost is the study time they forgo, which could have been used to complete assignments or review material. Such decisions exemplify opportunity costs as the benefits of the next best alternative are sacrificed.

Conclusion

The analysis of Caf Inc.'s production possibilities illustrates fundamental economic principles including the shape and slope of the PPF, opportunity costs, and resource allocation. Understanding these concepts aids in making informed decisions both in business and daily life, reinforcing the importance of efficiency and trade-offs in economic activity.

References

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