Greta starts using a new baking technique,and she can now do twice as much of everything.In a single day,Greta can now make 10 cakes or 8 pies,rather than the 5 cakes and 4 pies she could previously bake.Greta's production possibility frontier has _____,and her opportunity cost of making pies _____.
A)shifted right;is unchanged
B)shifted right;has decreased
C)not changed;has increased
D)not changed;has decreased

Question

Quizplus · Accepted Answer

Greta's ability to produce cakes and pies has increased due to the new baking technique, causing a rightward shift in her production possibility frontier. However, the opportunity cost of making pies has not changed since she still has to give up some cake production to make pies. Therefore, only choice A is correct.

Greta Starts Using a New Baking Technique,and She Can Now