In problem 1, Jane is willing to give up 0.75 pounds of corn per yard of cloth if she has 2 yards of cloth; 0.50 pounds of corn per yard of cloth if she has 4 yards of cloth; and 0.25 pound of corn per yard of cloth if she has 6 yards of cloth.

a. Draw a graph of Jane’s marginal benefit from corn.

b. What is Jane’s efficient quantity of corn?

Data from Problem 1

Jane’s Island’s production possibilities are given in the table to the right.

Draw a graph of the production possibility possibilities frontier on Jane’s Island.

What are Jane’s opportunity costs of producing corn and cloth at each output in the table?

Transcribed Image Text:

Corn (pounds Cloth per month) (yards per month) 3.0 and 2-0 and 2 1-0 and 4 and 6