c.If there is a shortage of vaccine in the city, whom should we vaccinate first—the elderly or the very young? (Assume that a person from one group has an equal likelihood of dying frominfluenza as a person from the other group.) d.If the city charges $25 per shot, how many people will pay? e.If the city charges $25 per shot, it will make a profit of $10 per shot, money that can go to pay for inoculating poor people. Should the city engage in such a scheme? 9.Atlantis is a small, isolated island in the South Atlantic. The inhabitants grow potatoes and catch fish. The accompanying table shows the maximum annual output combinations of potatoes and fish that can be produced. Obviously, given their limited resources and available technology, as they use moreof their resources for potato production, there are fewer resources available for catching fish.Maximum annualoutput Quantity of potatoes(pounds)Quantity of fish(pounds)A1,0000B800300C600500D400600E200650F0675a.Draw a production possibility frontier with potatoes on the horizontal axis and fish on the vertical axis illustrating these options, showing points A–F. (See the diagram below.) 5
FALL 2018, APS2 ECON 101 RAYACK b.Can Atlantis produce 500 pounds of fish and 800 pounds of potatoes? Explain.Where would this point lie relative to the production possibility frontier? c.What is the opportunity cost of increasing the annual output of potatoes from600 to 800 pounds? d.What is the opportunity cost of increasing the annual output of potatoes from200 to 400 pounds? e.Can you explain why the answers to parts c and d are not the same? What doesthis imply about the slope of the production possibility frontier? 6
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- Fall '19