Question
JTK will be harvesting 2 main products from their farm: apple and grapes. Because of the current situation, demand for grapes increases vigorously than apple.
JTK will be harvesting 2 main products from their farm: apple and grapes. Because of the current situation, demand for grapes increases vigorously than apple. In the Metro, grapes can sell as high as 20 pesos per piece. JTK is now thinking of converting the land into grapes plantation. Given the scenario, draw JTK's production possibilities frontier showing increasing opportunity cost of grapes production in terms of apple. Using a separate graph for each situation, show what would happen to the initial production possibilities frontier in each of the following:
a. If JTK chooses to produce efficient outcome, producing equal number of apple and grapes
b. If JTK increased 10% additional land for grapes production
c. If JTK withhold 10% land of apple production and convert it to grapes production
d. If the price of grapes increases to 25 pesos, so JTK allot more land for grapes plantation
e. Pest attacked almost all the apple but not the grapes.
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