a. If Brazil increases its production of ethanol from 40 barrels per day to 54 barrels per

Question:

a. If Brazil increases its production of ethanol from 40 barrels per day to 54 barrels per day, what is the of the additional ethanol?
b. If Brazil increases its production of food crops from 2 tonnes per day to 3 tonnes per day, what is the of the additional food?
c. What is the relationship between your answers to parts (a) and (b)?
Brazil produces ethanol from sugar, and the land used to grow sugar can be used to grow food crops. Suppose that Brazil€™s production possibilities for ethanol and food crops are as in the table.

Opportunity Cost
Opportunity cost is the profit lost when one alternative is selected over another. The Opportunity Cost refers to the expected returns from the second best alternative use of resources that are foregone due to the scarcity of resources such as land,...