Question

Use the data that is posted below to answer the following questions. If your answer has units to it, then please state those units.

Production Options	Sugar beets (tons)	Wheat  (tons)
A	100	0
B	90	10
C	70	20
D	40	30
E	0	40

a) Graph Production Possibilities Frontier (Curve) for Sugar Beets and Wheat. Put sugar beets on the vertical axis and label that axis Sugar Beets and put wheat on the horizontal axis and label that axis Wheat.

b) If we are producing 40 tons of beets and 30 tons of wheat, what is the cost of producing 10 more tons of wheat?

c) If we are producing 40 tons of beets and 20 tons of wheat, what is the cost of producing 10 more tons of wheat?

d) Explain why your answers for (b) and (c) above are different. After all in both questions we increased the production of wheat by 10 tons.

e) What can we say about the economy currently producing 90 tons of sugar beets and 40 tons of wheat given no change in resources and technology?

f) Which production option above (A, B, C, D or E) is the best point for this economy to be at? Explain your answer.

Answer 1