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Suppose that you decide to buy a pizzeria, where you can produce either pizza or calzones. Either product requires dough, cheese, and tomato sauce. The production of one pizza requiresone pound of dough, two pounds of cheese, and 12 ounces of tomato sauce. The production ofone calzone requires two pounds of dough, one pound of cheese, and 4 ounces of tomato sauce. Your current inventory includes 300 pounds of dough, 300 pounds of cheese, and 12,000 ouncesof tomato sauce.
Required:
a. Draw your PPC for pizza (P) and calzones (C).Put pizza (P) on the vertical axis.
b. What can be said about the utilization of resources when 50 pizzas and 50 calzones areproduced?
c. How would you characterize the allocation of 100 pizzas and 100 calzones?Whatabout 150 pizzas and 150 calzones?
d. What is the opportunity cost of the first pizza produced?What is the opportunity costof the last pizza produced?
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