Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Table 1-1 Possible Output Combinations Apples (thousands of kilos) Pears (thousands of kilos) A 70 0 B 60 20 C 50 36 D 40 48

Table 1-1

Possible Output Combinations

Apples

(thousands of kilos)

Pears

(thousands of kilos)

A

70

0

B

60

20

C

50

36

D

40

48

E

30

56

F

20

60

G

10

63

H

0

65

2.Refer to Table 1-1.The Fruit Farm produces only apples and pears. The table aboveshows the maximum possible output combinations of the two fruits using all resources and currently available technology.

a.Graph the Fruit Farm's production possibilities frontier. Put apples on the horizontal axis and pears on the vertical axis. Be sure to identify the output combination points on your diagram.

b.Suppose the Fruit Farm is currently producing at pointD. What is the opportunity cost of producing an additional 8,000 kilos of pears?

c.Suppose the Fruit Farm is currently producing at pointD. What happens to the opportunity cost of producing more and more pears? Does it increase, decrease or remain constant? Explain your answer.

d.Suppose the Fruit Farm is currently producing at point G. What happens to the opportunity cost of producing more and more apples? Does it increase, decrease or remain constant? Explain your answer.

e.Suppose the Fruit Farm is plagued by a maggot infestation which destroys apple trees but not pears. Show in a graph what happens to its PPF.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Slavery And American Economic Development

Authors: Gavin Wright

1st Edition

0807152285, 9780807152287

More Books

Students also viewed these Economics questions