Activity 2.

1: Production Possibilities Frontier (PPF)

Introduction: Imagine that you are the Production Manager of a company called “TECHY”,
which produces only two goods: smartphones and laptops. You will be participating in a
simulation that will produce the production possibilities frontier (PPF) for these two goods. What
do these two goods have in common?

Round (point) Number of Smartphones(X) Number of Laptops (Y)

A 0 140,000
B 20,000 120,000
C 45,000 85,000
D 40,000 130,000
E 50,000 0

Answer the following:

1. What the Shape of the Curve Tells You? ( illustration)
2. How It Affects the Economy?
3. Calculate the opportunity cost of the following points:

Smartphones Opportunity Laptops Opportunity Cost

Cost
Point: E to D Point: A to B
C to B D to B
B to A B to C
D to B A to E

Activity 2.2: Economic Models/Theory

Let’s say that Techy Company produces a laptop with different specification.

Laptop Price Quantity Quantit Price COG Revenu Tota Profi

(Product (produced (produced y (sales) S e l t
) ) ) (sales) Cost
Core i7 P30,000 80 50 P40,00
0
Core i5 P25,000 90 60 P35,00
0
Core i3 P20,000 100 80 P25,00
0
Quad P15,000 130 100 P19,00
Core 0
Celeron P13,000 150 130 P18,00
0

Direction:
1. Compute for the following:
(show your solution on the separate sheet of paper.)

A. Cost of Good Sold.

B. Revenue
C. Total Cost
D. Profit

2. What price turns out to be the optimal price to maximize revenue?

3. Which price point allows your Techy company the greatest profit?
Reflection:

As you study economics, you will hear a lot about making profits. Is it
wrong to earn a profit?.