1. The following is a production possibilities table for potatoes (lbs) and fish(lbs) in Atlantis, a small island in the South Atlantic. A B C D Potatoes 1,000 800 EF 600 Fish 0 300 500 600 400 200 0 650 675 a) Draw the production possibilities frontier with potatoes on the horizontal axis and fish on vertical axis illustrating these options, showing points A-F. b) Can Atlantis produce 500 pounds of fish and 800 pounds of potatoes? Explain. Where would this poi on the production possibilities curve? c) What is the opportunity cost of increasing the annual output of potatoes from 600 to 800 lbs? d) What is the opportunity cost of increasing the annual output of potatoes from 200 to 400lbs? e) Label point G inside the production possibilities curve. What does it indicate? Label H outside the cur What does this point indicate? What must occur for the economy to attain the level of production indicate by point H? 2. Why is capital goods and technology accumulation essential in rapid economic growth? 3. United States is one of the world's wealthiest countries. Think of a recent case in which the decisions of the U.S. government were severely constrained by scarcity. Describe the trade offs that were involved. What were the opportunity costs of the decisions that were actually made? 4. Who faces the highest opportunity cost (lost income) when they stay in school as opposed to working? Explain. (1) a high school graduate (2) a college graduate (3) a medical school graduate. 5. Distinguish inefficiency from economic contraction as it relates to the production possibilities curve. What causes each scenario? 6. What can a nation do to increase its rate of economic growth? Why is economic growth among the major goals of all countries?