Atlantis is a small, isolated island in the South Atlantic. The inhabitants grow potatoes and catch fresh
Question:
a. Examine the Maximum annual output options table above and the resulting Production Possibility Frontier Graph below and answer parts b - f.
b. Can Atlantis produce 500 pounds of fish and 800 pounds of potatoes? Explain.
c. What is the opportunity cost of increasing the annual output of potatoes from 600 to 800 pounds?
d. What is the opportunity cost of increasing the annual output of potatoes from 200 to 400 pounds?
e. Can you explain why the answers to parts c and d are not the same?
f. What does this imply about the slope of the production possibilityfrontier?
Opportunity cost is the profit lost when one alternative is selected over another. The Opportunity Cost refers to the expected returns from the second best alternative use of resources that are foregone due to the scarcity of resources such as land,...
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