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home / study / business / economics / economics questions and answers / 2. Production Possibilities Frontier: Screwdrivers And Bloody Marys Set-up: Screwdrivers Contains: ... Question: 2. Production Possibilities Frontier: Screwdrivers and Bloody Marys ... (1 bookmark) 2. 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?” Why in this example, "How many screwdriver drinks could be made, if you only made screwdriver" It is 5, and not 6 since I have 6 shots of vodka.

Explanation / Answer

The production function for both screwdrivers and Bloody Mars is a loentiff typei.e Q = min{x,y} where x = juice and y = vodka shots . Given this If one makes only the screwdrivers the maximum screwdrivers that can be made are 6 and Bloody Mary that can be made are 6.Therefore both the intercepts will be 6 units.

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