Section+Exercise+2+solutions-1 - Department of Economics...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Department of Economics Spring 2011 University of California, Berkeley Economics 1 Head GSI: Swetha Doraiswamy Section Exercise 2 for 1/25/11 & 1/26/11 1) A nation with fixed quantities of resources is able to produce any of the following combinations of cornbread and beef in a year: Combinatio n Cornbread (millions of loaves) Beef (thousands of pounds) A 75 B 60 12 C 45 22 D 30 30 E 15 36 F 40 a) Using the data in the table, graph the production possibilities frontier (ppf) (with beef on the vertical axes). Production Possibilities Frontier 5 10 15 20 25 30 35 40 45 20 40 60 80 Cornbread (loaves) PPF b) Does the principle of increasing opportunity cost hold in this nation? Explain briefly. ( Hint: What happens to the opportunity cost of cornbread measured in units of beef as cornbread production increases?) Page 1 of 2 Department of Economics...
View Full Document

Page1 / 2

Section+Exercise+2+solutions-1 - Department of Economics...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online