Table 1 shows Robinson Crusoes production possibilities. 1. What is his opportunity cost of a pound of
Question:
Table 1 shows Robinson Crusoe’s production possibilities.
1. What is his opportunity cost of a pound of berries when Crusoe increases the quantity of berries from 21 pounds to 26 pounds and production is efficient? Does this opportunity cost increase as he produces more berries?
2. If Crusoe is producing 10 pounds of fish and 21 pounds of berries, what is his opportunity cost of an extra pound of berries? And what is his opportunity cost of an extra pound of fish? Explain your answers.
Transcribed Image Text:
TABLE 1 Fish Possibility (pounds) A B C D EFCHI G Berries (pounds) and 36 35 33 0 4.0 and 7.5 and 10.5 and 30 13.0 and 26 21 15.0 and 16.5 and 15 17.5 and 18.0 and 80
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 0% (1 review)
1 If Crusoes production is efficient he is producing at a point on his PPF His opportunity cost of an extra pound of berries is the quantity of fish he must give up to get the berries It is calculated as the decrease in the quantity of fish divided by the increase in the quantity of berries as he moves along his PPF To increase the quantity of berries from 21 pounds to 26 pounds from row F to row E of Table 1 production of fish decreases from 15 pounds to 13 pounds To gain 5 pounds of berries Crusoe must forgo 2 pounds of fish The opportunity cost of 1 pound of berries is the 2 pounds of fish forgone divided by 5 pounds of berries gained25 of a pound of fish Crusoes opportunity cost of berries increases as he produces more berries To see why move Crusoe from row E to row D in Table 1 His production of berries increases by 4 pounds and his production of fish falls by 25 pounds His opportunity cost of 1 pound of berries increases to 58 of a pound of fish 2 Figure 1 graphs the data in Table 1 and shows Crusoes PPF If Crusoe is producing 10 pounds of fish and 21 pounds of berries he is producing at point Z Point Z is a point inside Crusoes PPF When Crusoe produces 21 pounds of berries he has enough time available to produce 15 pounds of fish at point F on his PPF To produce more fish Crusoe can move from Z toward F on his PPF and forgo no berries His opportunity cost of a ...View the full answer
Answered By
Tamil Elakkiya Rajendran
I'm currently involved in the research in the field of Biothermodynamics, Metabolic pathway analysis and computational Biology. I always prefer to share my knowledge whatever I have learnt through my degree whenever time permits.
5.00+
2+ Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Business questions
-
The accompanying table shows the daily production possibilities for two individuals, Tommy Trout from Alaska and Coleen Coffee from Columbia. Use the table to answer the following questions. a. What...
-
The following diagram shows the production possibilities boundary for Arcticland, a country that produces only two goods, ice and fish. Labour is the only factor of production. Recall that a linear...
-
Robinson Crusoe has decided that he will spend exactly 8 hours a day gathering food. He can either spend this time gathering coconuts or catching fish. He can catch 1 fish per hour and he can gather...
-
Using mean-variance portfolio theory, prove that the efficient frontier becomes a straight line in the presence of a risk-free asset. [3] Consider two independent assets, Asset A and Asset B, with...
-
If interest rates fell after the issuance of a bond and the company decided to retire the debt, would you expect the company to report a gain or loss on debt retirement? Describe the financial...
-
What is the purpose of interim financial reporting?
-
Defendant Monty J. Person began working for Garage Solutions, LLC, in March 2015. Three months into his employment, Person was sent by the owner of Garage Solutions, Mark Fontenot, to Rexburg, Idaho,...
-
The bank portion of the bank reconciliation for LaRoche Company at October 31, 2014, is shown below. The adjusted cash balance per bank agreed with the cash balance per books at October 31. The...
-
An airplane flies level in the + x direction 1 0 0 m above the ground at 1 6 0 m / s . the plane drops goods and supplies to some people on the ground. 1 . Draw the path the supplies would follow...
-
In 2007, the killer virus arrived in Hawaii, where almost all the queen bees used in the United States are bred. Bees are used to pollinate crops that are used in a third of the food we eat. Explain...
-
1. Describe the flows in the circular flow model in which expenditure on consumption goods and services, purchases of new national defense equipment, and payments for labor services appear. Through...
-
In the basic technology system, the inventory control clerk reviews the purchase requisition file to identify inventory needs. Explain how this file is created.
-
Company A buys bonds from Company B. The bonds carry with them contractual rights to annual interest and repayment of principal in 10 years. The price was quoted in an open market. What kind of...
-
The U.S. green energy industry is filled with failed firms. They became so dependent upon government subsidies and favors that they simply could not compete and produce a product or service that was...
-
4)The accounting records of rockiness company provided the data below?$ in 000s? Net income $25,200 Depreciation expense 3,300 Decrease in accounts receivable 2,000 Increase in inventory 4,500...
-
A taxpayer wishes to use costs from their home office as an expense on their Schedule C. They have an office that is two hundred (200) square feet and valid expenses (after using a Form 8829) of...
-
An industrial imaging system can be purchased for $95,000. At the end of five years, this unit will have a salvage value of $40,000. Alternative, you can lease the machine for five years, with annual...
-
Chemco employs a joint process (cost: $100,000) that produces two chemicals, JAV-100 and YAZ-200. At the current volumes, the value of these products at the split-off point is $80,000 and $40,000,...
-
Show that, given a maximum flow in a network with m edges, a minimum cut of N can be computed in O(m) time.
-
If the quantity demanded decreases by 100 sandwiches an hour at each price, what is the equilibrium price and what is the change in total surplus? The table shows the demand and supply schedules for...
-
If the quantity demanded decreases by 100 sandwiches an hour at each price, what is the equilibrium price and what is the change in total surplus? The table shows the demand and supply schedules for...
-
If the quantity supplied decreases by 100 sandwiches an hour at each price, what is the equilibrium price and what is the change in total surplus? The table shows the demand and supply schedules for...
-
In 1991, Geoffrey A. Moore, a lecturer and management consultant, wrote an influential book titled Crossing the I Chasm. The book became an instant must-read for managers, entrepreneurs, and...
-
Understand the table 12 and its impact on answers. Supporting document 5 is below: Understand the table detached from the health and safety executive site HSE UK. Noise and health surveillance 4 (a)...
-
Answer 2,3,4 questions. Don't give me a Question 1 answer. I need 2,3,4 questions answer. For the QFD Problem 4 Matrix, compute the (1) Customer requirements absolute weight. (2) Technical...
Study smarter with the SolutionInn App