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Scenario: 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
Scenario: 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 follows: Option Ethanol (barrels per day) Food crops (tons per day) A 70 0 B 60 10 50 20 D 40 40 E 30 50 F 20 70 G 10 100 a) Draw a graph of Brazil's PPF by using the above table. b) Explain the meaning of PPF and its importance. c) If Brazil produces 40 barrels of ethanol a day, how much food must it produce to achieve production efficiency? d) If Brazil increases its production of ethanol from 40 barrels per day to 50 barrels per day, what is the opportunity cost of the additional ethanol? e) If Brazil increases its production of food crops from 50 tons per day to 70 tons per day, what is the opportunity cost of the additional food? f) Is it possible to produce 70 barrels of Ethanol and 10 tons of food? g) Is it possible to produce 20 barrels of Ethanol and 50 tons of food? h) Is it possible to produce 10 barrels of Ethanol and 120 tons of food? 1) Is it possible to produce 60 tons of food and 10 barrels of Ethanol
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