1. Production Possibility Frontiers: Apples and wheat

Apples	Wheat
0	500
1	499
2	496
3	490
4	478
5	455
6	418
7	361
8	279
9	165
10	10

1. Draw a production possibilities curve for your 200-acre farm between growing apples and wheat . Is there a tradeoff between these two? How is a tradeoff shown in your graph? (Make sure you label your axes.)

2. Is the trade-off constant or does it change as you
3. have more or less wheat and apples? How is the trade-off represented in the slope of the line? Why does the trade-off change?

4. (1 point) What is the price of wheat? What is the price of apples? Add a column to Table 1 and give the price of additional bushels of wheat or apples. Where is the price of apples on your graph? What happens to the price of apples as you are growing more wheat and fewer apples? Why does the relative price change and how does this relate to the neoclassical theory of production?
5. (1 point) Suppose instead of producing wheat, you produce honey from bees who live off the pollen in the apple blossoms. What happens to your production possibility frontier? Does this mean that you have a free lunch?

Answer rating: 100% (QA)

Yes there is a tradeoff This is shown in the graph by the concavity of the production possibilities ... View the full answer