Goods Produced A B C D E Chips (bags) 0 10 12 14 16 Pretzels (bags)...

Goods Produced	A	B	C	D	E
Chips (bags)	0	10	12	14	16
Pretzels (bags)	50	40	30	20	0

How would a technological change that increases the production of only pretzels affect the production of chips? Explain

Solutions

Expert Solution

A technological change that increases the production of only pretzels will not affect the production of chips. The production will rotate and not shift. Thus, for instance, point A can become 0 units of chip and 60 units of pretzels. Point B can become 10 units of chips and 50 units of pretzels. Thus, for each unit of chips we can have more units of pretzels, but the production of chips can not be changed. The maximum units of chips that can be produced is still only 16.

Rahul Sunny answered 1 year ago

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