1. An island castaway spends eight hours each day acquiring two items-coconuts and fish-based on the...

 

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1. An island castaway spends eight hours each day acquiring two items-coconuts and fish-based on the following production possibilities schedule. Production Scenario A B C D Coconuts Fish 24 20 12 O 2120 3 a. From a starting point of production shown by scenario A, what is the cast- away's opportunity of catching the first fish (scenario A to B)? the second (scenario B to C)? the third (scenario C to D)? b. Do these results conform to the law of increasing opportunity costs? c. If you drew a graph showing the castaway's production possibilities curve, what shape would it have? d. What assumptions must be met for the castaway to operate on his production possibilities curve? e. What happens to the castaway's production possibilities curve if he works for 12 hours, instead of eight hours, each day? six hours each day? f. What happens to the castaway's production possibilities curve if he manages to make a fishing rod, which he then uses successfully to catch fish? 1. An island castaway spends eight hours each day acquiring two items-coconuts and fish-based on the following production possibilities schedule. Production Scenario A B C D Coconuts Fish 24 20 12 O 2120 3 a. From a starting point of production shown by scenario A, what is the cast- away's opportunity of catching the first fish (scenario A to B)? the second (scenario B to C)? the third (scenario C to D)? b. Do these results conform to the law of increasing opportunity costs? c. If you drew a graph showing the castaway's production possibilities curve, what shape would it have? d. What assumptions must be met for the castaway to operate on his production possibilities curve? e. What happens to the castaway's production possibilities curve if he works for 12 hours, instead of eight hours, each day? six hours each day? f. What happens to the castaway's production possibilities curve if he manages to make a fishing rod, which he then uses successfully to catch fish?

Answer rating: 100% (QA)

ANSWER a The opportunity cost of catching the first fish scenario A to B is calculated by finding th... View the full answer