home2 - EC 1, Section 1 UCLA Winter, 2003 A. Bresnock...

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EC 1, Section 1 Student Name: UCLA TA Name/Section: Winter, 2003 A. Bresnock Homework Assignment 2 (20 points) 1. The Hobbit Council (that governs the Shire in Middle Earth) consults its production archives and believes that it is capable of making the following amounts of vegetables and cobblestones. Vegetables (000s of lbs) Cobblestones (000s of tons) 20 0 16 5 12 10 8 15 4 20 0 25 (a) Does the production possibilities frontier for vegetables and cobblestones reflect the law of increasing opportunity costs? Support your answer with verbal and graphical explanations? (Be certain to include a definition of the law of increasing opportunity costs in your answer.) What is the opportunity cost of producing an additional cobblestone? V C (b) Now suppose that the Black Riders of Mordor burn and pillage much of the land in the Shire. This reduces the amount of arable land that can be used to grow vegetables. The result is shown in the new production possibilities frontier below. Vegetables (000s of lbs)
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This note was uploaded on 10/26/2009 for the course ECON 180-004-20 taught by Professor Bresnock during the Fall '09 term at UCLA.

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home2 - EC 1, Section 1 UCLA Winter, 2003 A. Bresnock...

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