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7 assume the farmer is currently producing 4 tons of

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7)Assume the farmer is currently producing 4 tons of coffee and 5 tons of tea. How much does it costthe farmer to double his tea production?8 tons of coffee8)Suppose a new technology is developed that increases tea production by 50%. Fill out the table andupdate the PPF.Pictured above (I decided to add both PPF on one graph)9)Is it now possible to produce 4 tons of coffee and 6 tons of tea?NoProductionCoffeeTeaTea with newtechnology010151913.51.98122.7710.53.469457.54.5464.934.55.2235.411.55.500
Now consider two farmers, Jeff and Lorissa, that can produce the above quantities of coffee OR tea.10) What is the opportunity cost for each to produce tea? Coffee?Jeff:oopportunity cost for tea= 1.5/2= 0.75oopportunity cost for coffee=2/1.5= 1.33Lorissa:oopportunity cost for tea: 1.5/0.5= 3oopportunity cost for coffee: 0.5/1.5= 0.3311) Who has a comparative advantage in producing tea? Why?Jeff because the opportunity cost is less for him.12) Suppose Jeff and Lorissa decided to trade coffee and tea with one another. Between what exchangeratios of coffee for tea (how many tons of coffee per ton of tea) would they both benefit from trade?

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