Question

Good day. I seem to be struggling with my assignment question. Tom is a lecturer who earns R1000 per day. He wants to pursue a career as a carpenter which he will earn R800 a day. Tom can negotiate the number of days he works at and will receive a rate of remuneration based on the number of days worked. 1. Construct a PPF to illustrate Tom's earning potential between the two careers if initially he was not working as a Carpenter, then he worked one week per month, then two, then three and finally four weeks per month. (if there's only 4 weeks in a month) Lecturer will be R5000 per week Carpenter will be R4000 per week I know y axis will be lecturer and x will be Carpentry. Now I'm confused about how to plot it. Both will have the amount he earns. I got as far as that.

Answer 1

The PPF or production possibility frontier shows the combination of two good or in this case combination of two carrier that a person can produce or persue within a given period of time. If the consumer wants to give only lecture he will earn R20000 in a month. This is the लेक्चरर intercept of the PPF. If he wants to be a carpenter only he will earn R16000 per month. This is carpentar intercept of the PPF. The PPF will be a linear combination of these two extreme. That is the PPF is the line joining these two points.

The PPF is depicted in the figure below