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Guest Guest
wrote...
5 years ago
Table 2-4

Possible Output CombinationsApples
(thousands of pounds)
Pears
(thousands of pounds)
A70  0
B6020
C5036
D4048
E3056
F2060
G1063
H  065

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.
Textbook 
Microeconomics

Microeconomics


Edition: 7th
Authors:
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bli14bli14
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Posts: 390
5 years ago
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Guest Author
wrote...
5 years ago
Exactly what I needed for my project, TYSM
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