Atlantis is a small, isolated island in the South Atlantic. The inhabitants grow potatoes and catch fish. The accompanying table shows the maximum annual output combinations of potatoes and fish that can be produced. Obviously, given their resources and available technology, as they use more of their resources for potato production, there are fewer resources available for catching fish. Draw a production possibility frontier with potatoes on the horizontal axis and fish on the vertical axis illustrating these options, showing points A-F Can Atlantis produce 500 pounds of fish and 800 pounds of potatoes? Explain where would this point lie relative to the production possibility frontier? 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? Can you explain why the answers to part C and D are not the same? What does this imply about slope of the production possibility frontier?

Question

Want to see the full answer?

Answer 1

Question

Chapter 2, Problem 16P

To determine

Atlantis is a small, isolated island in the South Atlantic. The inhabitants grow potatoes and catch fish. The accompanying table shows the maximum annual output combinations of potatoes and fish that can be produced. Obviously, given their resources and available technology, as they use more of their resources for potato production, there are fewer resources available for catching fish.

Draw a production possibility frontier with potatoes on the horizontal axis and fish on the vertical axis illustrating these options, showing points A-F

Can Atlantis produce 500 pounds of fish and 800 pounds of potatoes? Explain where would this point lie relative to the production possibility frontier?

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?

Can you explain why the answers to part C and D are not the same? What does this imply about slope of the production possibility frontier?

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Respond to this post. Hello Professor, A rise in consumption in the economy would cause an increase in aggregate demand. Therefore, when consumers spend money on everyday goods and services, it not only helps to stimulate economic growth, but it could also present potential issues like unsustainable debt levels or inflation. I believe that it would be beneficial to consider such factors and adopt a purchasing strategy to help navigate the challenges posed by inflation or unsustainable debt levels. First, do you think our business will be affected because inflation is rising? How? Yes, I do believe that the business will be affected because of inflationary pressures. Inflation rising will affect the cost of goods, services, and labor, which could lead to higher operating expenses. The potential reduction of profit margin because of inflation could lead to a smaller percentage of revenue being retained as profit. Therefore, inflation rising will force us to raise prices for…

Not use ai please

Hshshsheheheh