Question

Auto Bull's-Eye offers a 10-minute oil change and 30-minute brake check. There are two technicians who perform each of these services. Next week, the shop is offering a discounted oil change. How might this affect the production possibilities curve for next week?

Answer 1

Since there are only two technicians, they can only take so much work. The production possibility curve will go up initially but will flatten as the technicians reach their limit.