Ppf Tradeoff
1. The problem shows a Production Possibility Frontier (PPF) representing trade-offs between grilled chicken meals (Product A) and unlimited rice servings (Product B) at a Mang Inasal branch.
2. The table lists feasible production points:
- A: 120 chicken, 0 rice
- B: 100 chicken, 20 rice
- C: 80 chicken, 40 rice
- D: 40 chicken, 60 rice
- E: 0 chicken, 80 rice
3. The PPF is a downward-sloping linear curve showing opportunity cost: producing more rice servings requires producing fewer chicken meals.
4. The opportunity cost between A and B is calculated as:
$$\frac{120-100}{20-0} = \frac{20}{20} = 1$$ chicken meal per rice serving.
5. To express the PPF equation, note it is linear between (120,0) and (0,80). Let $x$ = number of chicken meals, $y$ = number of rice servings.
6. The slope $m$ is:
$$m = \frac{0 - 80}{120 - 0} = \frac{-80}{120} = -\frac{2}{3}$$
7. The PPF line equation in slope-intercept form is:
$$y = mx + b$$
Since when $x=0$, $y=80$, then $b=80$:
$$y = -\frac{2}{3}x + 80$$
8. This equation represents the maximum rice servings $y$ for any given grilled chicken meals $x$, illustrating the trade-off.
9. Points on the curve are efficient (all resources fully used). Points inside the curve represent underutilized resources, points outside are unattainable with current resources.
Final answer:
The PPF equation is $$y = -\frac{2}{3}x + 80$$ where $$x$$ is grilled chicken meals and $$y$$ is rice servings. This equation captures the trade-off and opportunity cost between the two products.