ppc3a - Additional Problem#3 PPCs(Answer Key 1 The...

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Additional Problem #3 : PPCs (Answer Key) 1. The Riverdale city council hires a group of experts in order to estimate the production possibilities of the limited amount of undeveloped land that lies within their jurisdiction. The experts determine that the following production alternatives are possible at this point in time. Rice (millions of lbs) Houses 0 105 10 100 20 90 30 75 40 55 50 30 60 0 (a) Does the production possibilities frontier for rice and houses 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.) Calculate the opportunity cost associated with increasing the amount of rice production by units of 10 million pounds at a time. 0 20 40 60 80 100 120 0 1 02 03 04 05 06 07 0 Rice (millions of lbs.) Houses Yes. As rice s by 10 million lbs. at a time, the number of houses decreases by 5, 10, 15, 20, 25, and 30. The decrease in the number of houses is the opportunity cost of ed rice production.
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ppc3a - Additional Problem#3 PPCs(Answer Key 1 The...

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