6. Suppose that lumber companies begin to clear-cut forest areas instead of cutting them selectively. Clear-cutting improves the economy's ability to produce lumber but not corn. The following table describes such a situation. Draw a new production possibilities curve. For which combination does clear-cutting fail to change the amount of corn and lumber produced? Combination
6. Suppose that lumber companies begin to clear-cut forest areas instead of cutting them selectively. Clear-cutting improves the economy's ability to produce lumber but not corn. The following table describes such a situation. Draw a new production possibilities curve. For which combination does clear-cutting fail to change the amount of corn and lumber produced? Combination
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Transcribed Image Text:6. Suppose that lumber companies begin to clear-cut forest areas instead of cutting them selectively.
Clear-cutting improves the economy's ability to produce lumber but not corn. The following table
describes such a situation. Draw a new production possibilities curve. For which combination does
clear-cutting fail to change the amount of corn and lumber produced? Combination
Combination
A'
PAMARAA
B'
C'
D'
E'
G'
Quantity of corn
(billions of bushels
per year)
0
1
2
3
4
5
6
Quantity of
lumber (billions of
board feet per
year)
75
72
66
57
45
30
0
After the introduction of clear-cutting most of the new production possibilities curve is
(outside, inside, the same as) the earlier curve. The opportunity cost of corn has
(increased, decreased) as a result of clear-cutting.
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