Production Possibilities Frontier: Screwdrivers and Bloody Marys

Set-up:

Screwdrivers contains: orange juice and one shot of vodka

Bloody Mary contains: tomato juice and one shot of vodka

Assumption: plenty of either juice, but only one small bottle of vodka (6 shots)

a. (0.5 pt) Create the PPF:

Screwdrivers on the vertical axis

Bloody Marys on the horizontal axis

Label the vertical and horizontal axes numerically 

To get the x-intercept: “How many Bloody Marys could be made, if you only made Bloody Marys?”

To get the y-intercept: “How many Screwdrivers could be made, if you only made Screwdrivers?”

b. What type of slope does the PPF have? Positive or Negative

c. What kind of a relationship does the PPF have? Direct or Inverse

d. Could you make 6 of both drinks (label this point F on the graph)? Yes or No. How would you describe this point F? Feasible or Not Feasible

e. Could you make 2 of both drinks (label this point E on the graph)? Yes or No. Are you using all of your resources? Yes or No. How would you describe this point E? Efficient or Inefficient

f. If you were originally producing 3 Bloody Marys & 3 Screwdrivers and wanted to now make 4 Screwdrivers, what would be the opportunity costs?

g. Give an example of something that might cause this PPF to shift out.