Part 1: (1) The Farmer has an endowment of $20 that can be used to produce corn or cows. To produce corn, it costs the Farmer $1 for each unit of production. To produce cows, it costs the Farmer $4 for each unit of production. Graph the production possibilities curve below for the Farmer. Production Possibilities for the Farmer (2) The Rancher has an endowment of $20 that can be used to produce corn or cows. To produce a ton of corn, it costs the Rancher $2 for each unit of production. To produce cows, it costs the Rancher $5 for each unit of production. Graph the production possibilities curve below for the Rancher. Production Possibilities for the Rancher. Suppose each individual wants a balanced diet. They spent half their money producing each good. Fill out the table below showing how much each person produces and consumes of corn and cows. Tons of Corn Produced/Consumed Cows Person Produced/Consumed Farmer Rancher After filling out the table, place a dot on the Rancher's and Farmer's graph to show this bundle of goods. Trade The Farmer and Rancher meet at the feed store and have a discussion about bettering their lives. They heard in economics class that people can be made better off from trade and want to try it out. The Farmer comes to the Rancher with the following proposals. The Farmer proposes that you (the Rancher) spend all your effort making cows, and trades away cows to get corn with the Farmer. If you spend all your effort producing cows, how many cows can be made? Now, the Farmer makes the following three offers to you, the Rancher. Offer 1: The Farmer gives the Rancher 4 tons of corn in exchange for 2 cows. Plot this new consumption point on the Rancher's and Farmer's graph and label it 1. Is this an acceptable offer to the Rancher? Farmer? Offer 2: The Farmer gives the Rancher 5 tons of corn in exchange for 2 cows. Plot this new consumption point on the Rancher's and Farmer's graph and label it 2. Is this an acceptable offer to the Rancher? Farmer? Offer 3: The Farmer gives the Rancher 6 tons of corn in exchange for 2 cows. Plot this new consumption point on the Rancher's and Farmer's graph and label it 3. Is this an acceptable offer to the Rancher? Farmer?