ppc1 - yields of corn as shown below: Possibility Corn...

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1 Additional Problem 1 : PPCs Suppose Jane’s production possibility frontier (PPF) for corn and cloth is initially described in the following table: Possibility Corn (1 lbs./mo.) Cloth (yds/mo.) A 20 0 B 18 1 C 15 2 D 11 3 E 6 4 F 0 5 a) Draw Jane’s PPF and explain what this curve represents. b) Determine the opportunity costs associated with moving from point A to point B, B to C, C to D, D to E, and E to F. Are the opportunity costs you determined increasing, decreasing, or constant? Explain your answer. c) Now, assume that a change in weather conditions enables Jane to produce higher
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Unformatted text preview: yields of corn as shown below: Possibility Corn (lbs./mo.) A 140 B 130 C 120 D 100 E 60 F 0 Graph the new production possibility curve. You may add it to your graph in part (a). d) Calculate Janes new opportunity costs associated with moving from point A to point B, B to C, C to D, D to E, and E to F. Are the opportunity costs you determined increasing, decreasing, or constant? Explain your answer. e) Compare your answers to (b) and (d). Have Janes opportunity costs gone up, down, or remained the same? Explain your answer....
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