Table 2-4
| Possible Output Combinations | Apples
(thousands of pounds) | Pears
(thousands of pounds) |
| A | 70 | 0 |
| B | 60 | 20 |
| C | 50 | 36 |
| D | 40 | 48 |
| E | 30 | 56 |
| F | 20 | 60 |
| G | 10 | 63 |
| H | 0 | 65 |
Refer to Table 2-4. The Fruit Farm produces only apples and pears. The table above
shows the maximum possible output combinations of the two fruits using all resources and currently available technology.
| a. | Graph the Fruit Farm's production possibilities frontier. Put apples on the horizontal axis and |
pears on the vertical axis. Be sure to identify the output combination points on your diagram.
| b. | Suppose the Fruit Farm is currently producing at point D. What is the opportunity cost of |
producing an additional 8,000 pounds of pears?
| c. | Suppose the Fruit Farm is currently producing at point D. What happens to the opportunity |
cost of producing more and more pears? Does it increase, decrease, or remain constant? Explain your answer.
| d. | Suppose the Fruit Farm is currently producing at point G. What happens to the opportunity cost |
of producing more and more apples? Does it increase, decrease, or remain constant? Explain your answer.
| e. | Suppose the Fruit Farm is plagued by the apple maggot infestation which destroys apple trees |
but not pear trees. Show in a graph what happens to its PPF.
Quick Reply
