St Atanagio is a remote island in the Atlantic. The inhabitants grow corn and breed poultry. The accompanying table shows the maximum annual output combinations of corn and poultry that can be produced. Obviously, given their limited resources and available technology, as they use more of their resources for corn production, there are fewer resources available for breeding poultry.

Maximum annual output options	Quantity of Corn (pounds)	Quantity of Poultry (pounds)
1	1200	0
2	1000	300
3	800	500
4	600	600
5	400	700
6	200	775
7	0	850

Examine the following production possibility frontier graph with corn on the horizontal axis and poultry on the vertical axis illustrating these options and showing points 1–7.break even  

Can St. Atanagio produce 650 pounds of poultry and 650 pounds of corn? Explain. Where would this point lie relative to the production possibility frontier? 

b.  What is the opportunity cost of increasing the annual output of corn from 800 to 1000 pounds?

c.  What is the opportunity cost of increasing the annual output of corn from 200 to 400 pounds?

Transcribed Image Text:

Quantity of Poultry 900 800 700 600 500 400 300 200 100 0 0 St Atanagio PPF 0,850 200 200, 775 400 400, 700 600, 600 800, 500 600 800 Quantity of Corn 1000 1000, 300 1200, 0 1200 1400 Quantity of Poultry 900 800 700 600 500 400 300 200 100 0 0 St Atanagio PPF 0,850 200 200, 775 400 400, 700 600, 600 800, 500 600 800 Quantity of Corn 1000 1000, 300 1200, 0 1200 1400

Answer rating: 100% (QA)

a No because the point 650650 will lie outside the PPF and is thus feasible b Op... View the full answer