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midterm1practicesol

# midterm1practicesol - 1 Cathy and Reid each own a 50-acre...

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1. Cathy and Reid each own a 50-acre plot of land. Both can choose whether to devote all 50 acres to producing sweet potatoes, all 50 acres to producing asparagus, or produce sweet potatoes on some of their land and asparagus on the rest. Cathy can produce 10 bushels of sweet potatoes per acre each year, and she can produce 5 bushels of asparagus per acre each year. Reid can produce 12 bushels of sweet potatoes per acre each year, and he can produce 3 bushels of asparagus per acre each year. a. (3 points) On the same graph, plot Cathy’s and Reid’s annual PPF. Put sweet potatoes on the y-axis and asparagus on the x-axis. For each PPF, label the x-intercept, the y-intercept and the slope. b. (2 points) Find the opportunity cost of producing sweet potatoes for Cathy and Reid. c. (2 points) Find the opportunity cost of producing asparagus for Cathy and Reid. d. (2 points) In which good does each have a comparative advantage?

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