Question

Mary's bakery shop specialises in baking sponge cakes and biscuits. a) Use the data in the following table to draw a production possibilities frontier (PPF) forthe bakery shop. (5 marks)

b) Consider production choices A, B, C, D and E. Which choice is efficient? (2 marks)Explain. (3 marks) c) Assume the bakery moves to a larger shop with increased capacity and more workers are hired. How would the production possibility frontier be expected to shift? Illustrate the shift in the PPF from the initial PPF developed in part a). (5 marks)

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