Question

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. We now know that Greta's production possibility frontier:
a. has shifted right, but her opportunity costs of making pies are unchanged.
b. has shifted right, but her opportunity costs of making pies have decreased.
c. has not changed, but her opportunity costs of making pies have increased.
d. has not changed, but her opportunity costs of making pies have decreased.

Answer 1

Answer:

a. has shifted right, but her opportunity costs of making pies are unchanged.

Explanation:

As we know that Greta curve should be shifted to righward as she can generated more and more units for both the goods so here the c and d option would be remooved. The option A and optoin B are considering the opportunity cost so here we can see that

10 ÷8 = 5 ÷ 4

5 ÷ 4 = 5 ÷ 4

As it can been seen that the opportunity cost remains the same

Therefore the option A is selected