I have created an accurate graph on excel and I believe the answers to the first 2 portions of the question are:
The opportunity cost of the first 2,000 automobiles is the inability to produce 1000 tons of beef or we give up 1000 tons of beef in order to produce 2,000 automobiles.
The opportunity cost per thousand tons of beef is highest between points E and D – at these points the cost of producing 2,000 cars (the number of cars produced between point D and E) means the loss of 4,000 tons of beef – down to zero production as 8,000 automobiles are produced.
I am unsure of the third part because the difference between the points is the same!
Here is the question!
Problem Set – Chapter 2 – FA2009
1. The following is a set of hypothetical production possibilities for a nation.
Combination
Beef (thousands of tons) Automobiles (thousands)
A 10 0
B 9 2
C 7 4
D 4 6
E 0 8
a. Plot (EXCEL directions are on this site.) these production possibilities data, placing automobiles on the horizontal axis. What is the opportunity cost of the first 2,000 automobiles produced? Between which points is the opportunity cost per thousand automobiles highest? Between which points is the opportunity cost per thousand tons of beef highest? (10 pts).
2 answers
Sra
5 answers