The prairie dog has always been considered a problem for Canadian cattle ranchers. They dig holes that cattle and horses can step in, and they eat grass necessary for cattle. Recently, ranchers have discovered that there is a demand for prairie dogs as pets. In some areas, prairie dogs can sell for as high as $150. Cattlemen are now fencing off prairie dog towns on their land so these towns will not be disturbed by their cattle. Draw a production possibilities frontier demonstrating a rancher’s production option between cattle production and prairie dog production, showing increasing opportunity cost and what would happen in each of the following situations (using a separate graph for each situation): a. The outcome is efficient, with ranchers choosing to produce equal numbers of cattle and prairie dogs. b. As a protest against the government introducing the grey wolf back into the wild in their province, ranchers decide not to use 25% of the available grassland for grazing. c. The price of prairie dogs increases to $200 each, so ranchers decide to allot additional land for prairie dogs.
The prairie dog has always been considered a problem for Canadian cattle ranchers. They dig holes that cattle and horses can step in, and they eat grass necessary for cattle. Recently, ranchers have discovered that there is a demand for prairie dogs as pets. In some areas, prairie dogs can sell for as high as $150. Cattlemen are now fencing off prairie dog towns on their land so these towns will not be disturbed by their cattle. Draw a production possibilities frontier demonstrating a rancher’s production option between cattle production and prairie dog production, showing increasing opportunity cost and what would happen in each of the following situations (using a separate graph for each situation): a. The outcome is efficient, with ranchers choosing to produce equal numbers of cattle and prairie dogs. b. As a protest against the government introducing the grey wolf back into the wild in their province, ranchers decide not to use 25% of the available grassland for grazing. c. The price of prairie dogs increases to $200 each, so ranchers decide to allot additional land for prairie dogs.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The prairie dog has always been considered a problem for Canadian cattle ranchers. They dig holes that cattle and horses can step in, and they eat grass necessary for cattle. Recently, ranchers have discovered that there is a demand for prairie dogs as pets. In some areas, prairie dogs can sell for as high as $150. Cattlemen are now fencing off prairie dog towns on their land so these towns will not be disturbed by their cattle.
Draw a production possibilities frontier demonstrating a rancher’s production option between cattle production and prairie dog production, showing increasing
a. The outcome is efficient, with ranchers choosing to produce equal numbers of cattle and prairie dogs.
b. As a protest against the government introducing the grey wolf back into the wild in their province, ranchers decide not to use 25% of the available grassland for grazing.
c. The
d. The government grants new leases to ranchers, giving them 10,000 new hectares of grassland each for grazing.
e. A drought destroys most of the available grass for grazing of cattle, but not prairie dogs since they also eat plant roo
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