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Tom Bombadill happily lives on his own in a little forest eating honey and almonds. He is able to gather one liter of honey
Tom Bombadill happily lives on his own in a little forest eating honey and almonds. He is able to gather one liter of honey per hour he spends working his bee hives, and he can collect 30 grams of almonds per hour working in his almond orchard. These rates are the same no matter how much time he spends in each activity. He seeks a work-life balance, so he will not work more than four hours a day. A) Draw Tom's production possibilities curve/frontier. Make sure that you include units on the axes. B) What is the per-unit opportunity cost of one gram of almonds? C) What accounts for the shape of the PPC? In other words, what is it about the relationship between gathering honey and collecting almonds that explains the shape? D) Illustrate on your graph from part A what would happen if Tom developed a new, more efficient bee hive that allowed him to gather 1.5 liters of honey per hour instead of Iliter of honey.
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