The figure given below represents the PPC in two nations

Question

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4
 
-Julio makes wine and beer. Last year he made 20 bottles of wine and 20 cases of beer. If the price of grapes goes down (making wine cheaper to make), Julio will be able to make the same amount of wine and more beer.

Quizplus · Accepted Answer

If the price of grapes goes down, it would lower the cost of producing wine, making it feasible for Julio to produce the same amount of wine and allocate more resources to produce beer, leading to an outward shift in his production possibilities frontier.