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i. 111. Draw a production possibility frontier with potatoes on the horizontal axis and fish on the vertical axis illustrating these options, showing points A-F. If Winterfell produces no fish, what is the maximum potato production? Can Winterfell produce 500 pounds of fish and 800 pounds of potatoes? Explain. Where would this point lie relative to the production possibility frontier? Is this point efficient?

i. 111. Draw a production possibility frontier with potatoes on the horizontal axis and fish on the vertical axis illustrating these options, showing points A-F. If Winterfell produces no fish, what is the maximum potato production? Can Winterfell produce 500 pounds of fish and 800 pounds of potatoes? Explain. Where would this point lie relative to the production possibility frontier? Is this point efficient?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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2) In Winterfell, firms produce potatoes and fish, and households buy potatoes and 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 more of their resources for potato production, there are fewer resources available for catching fish. i. 11. 111. . V. vi. Draw a production possibility frontier with potatoes on the horizontal axis and fish on the vertical axis illustrating these options, showing points A-F. If Winterfell produces no fish, what is the maximum potato production? Can Winterfell produce 500 pounds of fish and 800 pounds of potatoes? Explain. Where would this point lie relative to the production possibility frontier? Is this point efficient? iv. Suppose Winterfell is producing 200 potatoes and 200 fishes. Is this an efficient point? How many additional fish could they produce without giving up any potatoes? What is the opportunity cost of increasing the annual output of potatoes from 600 to 800 pounds? What is the opportunity cost of increasing the annual output of potatoes from 200 to 400 pounds? VII. Maximum annual output options VIII. A B с D E F Quantity of potatoes (pounds) 1,000 800 600 400 200 0 Quantity of fish (pounds) 0 300 500 600 650 675 Can you infer about the shape of the PPF? (Hint: Find the per unit opportunity cost of Potatoes relative to fish/ Per unit opportunity cost of fish relative to potatoes) Explain what will happen to PPF in the following situations: a. Following a period of discrimination against women and minorities, Winterfell legally ended such discrimination in the work place. b. Before the Battle of Winterfell, Winterfell was a full-employment of their resources, but during the war many of their facilities were bombed and people were killed.
Transcribed Image Text:2) In Winterfell, firms produce potatoes and fish, and households buy potatoes and 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 more of their resources for potato production, there are fewer resources available for catching fish. i. 11. 111. . V. vi. Draw a production possibility frontier with potatoes on the horizontal axis and fish on the vertical axis illustrating these options, showing points A-F. If Winterfell produces no fish, what is the maximum potato production? Can Winterfell produce 500 pounds of fish and 800 pounds of potatoes? Explain. Where would this point lie relative to the production possibility frontier? Is this point efficient? iv. Suppose Winterfell is producing 200 potatoes and 200 fishes. Is this an efficient point? How many additional fish could they produce without giving up any potatoes? What is the opportunity cost of increasing the annual output of potatoes from 600 to 800 pounds? What is the opportunity cost of increasing the annual output of potatoes from 200 to 400 pounds? VII. Maximum annual output options VIII. A B с D E F Quantity of potatoes (pounds) 1,000 800 600 400 200 0 Quantity of fish (pounds) 0 300 500 600 650 675 Can you infer about the shape of the PPF? (Hint: Find the per unit opportunity cost of Potatoes relative to fish/ Per unit opportunity cost of fish relative to potatoes) Explain what will happen to PPF in the following situations: a. Following a period of discrimination against women and minorities, Winterfell legally ended such discrimination in the work place. b. Before the Battle of Winterfell, Winterfell was a full-employment of their resources, but during the war many of their facilities were bombed and people were killed.
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