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Running head: ECONOMICS FOR DECISION MAKING
Economics for Decision Making
Name of the Student
Name of the University
Author note

ECONOMICS FOR DECISION MAKING1
Table of Contents
Answer to question 1.......................................................................................................................2
Answer to question a...................................................................................................................2
Answer to question b...................................................................................................................4
Answer to question 2.......................................................................................................................4
Answer to question a...................................................................................................................4
Answer to question b...................................................................................................................6
Answer to question 3.......................................................................................................................6
Answer to question a...................................................................................................................6
Answer to question b...................................................................................................................7
Answer to question c...................................................................................................................8
Answer to question 4.......................................................................................................................8
Answer to question a...................................................................................................................8
Answer to question b...................................................................................................................8
Answer to question c...................................................................................................................9
Answer to question 5.......................................................................................................................9
References......................................................................................................................................11

ECONOMICS FOR DECISION MAKING2
Answer to question 1
Answer to question a
i)
0 10 20 30 40 50 60 70 80 90
0
10
20
30
40
50
60
70
Production Possibility Curve
Grade (%)
Work (hours per week)
Figure 1: Production Possibility Curve
ii)
The concept of increasing opportunity cost can be explained with the help of above table.
The table above shows opportunity cost of grade for work hours. The estimates suggest that
opportunity cost increases along the PPC meaning in order to obtain more grades Joan must
sacrifice more and more hours of work.

ECONOMICS FOR DECISION MAKING3
iii)
If the opportunity cost that Joan faces for increasing her grade in terms of work hours
become constant the PPC would have a constant slope. The PPC would then be a straight line.
The concave shape of PPC (Figure 1) is more likely to occur rather than straight line (McConnell
et al. 2013). This is because opportunity costs in real world in mostly increasing in nature rather
than being constant.
Figure 2: Straight line PPC (constant opportunity cost)
iv)
Resources (here time) would not be used optimally if combination of grades and work hours of
Joan were inside the PPC.
v)
In order to attain a combination of grades and hours of work per week Joan should study more
efficiently such that more grades can be obtained along with devoting more time for works.