Employees at Bank of America are good at providing banking services and workers at Ben & Jerry's are good at making ice cream. If some bankers are moved to making ice cream, we get a small increase in the amount of ice cream produced and a large decrease in the amount of banking services provided. If the PPF has banking services on the vertical axis and ice cream on the horizontal axis, the effect of the change reflects

Question

Quizplus · Accepted Answer

The scenario described indicates a situation where resources (employees) are specialized in their respective fields. Moving employees from banking to ice cream production results in a small increase in ice cream production but a large decrease in banking services. This suggests that the opportunity cost of producing more ice cream (in terms of lost banking services) increases as more bankers are reassigned to ice cream production, which is characteristic of a bowed-out (concave) production possibilities frontier (PPF), indicating increasing opportunity costs as resources are moved from one production to another.

Employees at Bank of America Are Good at Providing Banking