Unit 2 Weekly Exercise S18 Online.docx - Unit 2Production...

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Unit 2—Production Possibilities and Comparative AdvantageA farmer has 10 acres of land and has to choose betweenplanting coffee trees and tea bushes. The table shows theproduction (in 1,000’s of pounds) of coffee and tea as afunction of the number of acres planted with coffee.1)Calculate the opportunity cost of planting oneadditional acre of coffee as a ratio of what is given upto what is gained.2)Is the opportunity cost of coffee going up, down, orstaying the same as you plan more coffee?
3)Draw the production possibility frontier for the farmer and identify points that are attainable (possible), efficient, and unattainable (not possible).A – Unattainable making 3.4 coffeeand 9 teaB – Efficient making 4 coffee and 6 teaC – Attainable making 1.9 coffee and 2TeaCoffee (Thousands of pounds)

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