Table 2-5 -Refer to Table 2-5.The Shellfish Shack Produces Only Shrimp and Produces

question 38

Essay

Table 2-5

-Refer to Table 2-5.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:

Productivity

The measure of the efficiency of a person, machine, system, etc., in converting inputs into useful outputs.

Output/Input

A measure of efficiency that compares the quantity or quality of outputs (results, products) generated by a system to the inputs (resources, time) used.

Productivity

The measure of how efficiently resources are used to produce outputs.

Inputs

Resources used in the production process to generate outputs, including raw materials, labor, and capital.