Table 2-7 -Refer to Table 2-7. the Shellfish Shack Produces Only Shrimp

question 27

Essay

Table 2-7

-Refer to Table 2-7. The Shellfish Shack produces only shrimp and oysters. The table above shows the maximum possible output combinations of the two types of shellfish using all resources and currently available technology.
a. Suppose The Shellfish Shack is currently producing at point E. What is the opportunity cost of producing an additional 11,000 pounds of oysters?
b. Suppose The Shellfish Shack is currently producing at point E. What happens to the opportunity cost of producing more and more shrimp? Does it increase, decrease, or remain constant? Explain your answer.
c. Suppose The Shellfish Shack is currently producing at point B. What happens to the opportunity cost of producing more and more oysters? Does it increase, decrease, or remain constant? Explain your answer.
d. Suppose The Shellfish Shack is plagued by a disease which destroys oyster beds but not shrimp habitats. What would happen to its PPF?

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Definitions:

Equivalent Value

The amount that represents the same value when compared under different conditions or assumptions.

Due Today

The amount of money that must be paid or is payable today.

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Short Term Debt

Refers to any financial obligation that is due for repayment within one year.