# Iii explain why the production possibility curve you

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iii) Explain why the production possibility curve you have drawn is concave to the origin.(1mark)iv) Other than the production possibility curve, what is ONE piece of information that the farmershould consider when deciding what combination of flowers and eggs to produce?(1mark)v) The Ministry of Agriculture and Fisheries has discovered a new pest that will destroy some ofthe flowers this farmer is intending to grow. Show the effect of this pest on the productionpossibility curve you have drawn.(1mark)vi) State two assumptions of the Production Possibility Frontier.(1mark)B)Three classmates are faced with the following situations.Jenni worked as a paper deliverer after school and earns \$10 a day. She wants to play soccer forher school team and needs to take Thursday off her paper run for practice. As well, she buysbooks costing \$120 and the subs for team are \$25.Moan wants to go on an Outward-Bound Expedition. The total cost is \$675. Her parents approveof this trip and said they will meet the full cost.Alaina loses her economics textbook which had cost the school \$35. She is asked to pay \$20towards replacing it.i) What was the opportunity cost of Jenni?(1mark)ii) What was the opportunity cost of Moan going on the Outward-Bound Expedition?(1mark)iii) What was the opportunity cost of his expedition to Moan’s parents?(1mark)iv) What was the opportunity cost of Alaina losing her textbook?(1mark)C)Differentiate between the following pairs of terms:(4marks)i.Law of Diminishing Returns and Law of Increasing costs.ii.Capital Goods and Consumer Goods.6
QUESTION 2.COST OF PRODUCTION.(10Marks)Refer to the following table to answer the questions:Schedule of Production Costs and Average Revenue for a Dalo Producing FirmOutputAVC(of Dalo)AR (\$)132080023006103276530425041052203406250320Note: The fixed cost of production is \$400Required:a) Calculate:(4marks)i. Marginal Cost at 4 units of Dalo.ii. Total Cost at 6 units of Daloiii. Total Revenue at 5 units of Daloiv. Total Variable cost at 3 units of Dalob) Sate the formula to calculate:(2marks)i. Total Variable Cost (TVC)ii. Average Total Cost (ATC)c) Complete the following statements by filing in the Answer Book.A firm’s marginal cost curve always intersects the ______(i)_______of the average cost curve.This means that if the marginal cost is less than average cost then average cost is __(ii)_______.

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Term
Three
Professor
NoProfessor
Tags
Economics of production, Jenni