Table 2-4 -Refer to Table 2-4.The Fruit Farm Produces Only Apples and Produces

question 55

Essay

Table 2-4

-Refer to Table 2-4.The Fruit Farm produces only apples and pears.The table above shows the maximum possible output combinations of the two fruits using all resources and currently available technology.
a.Graph The Fruit Farm's production possibilities frontier.Put apples on the horizontal axis and pears on the vertical axis.Be sure to identify the output combination points on your diagram.
b.Suppose The Fruit Farm is currently producing at point D.What is the opportunity cost of producing an additional 8,000 pounds of pears?
c.Suppose The Fruit Farm is currently producing at point D.What happens to the opportunity cost of producing more and more pears? Does it increase, decrease, or remain constant? Explain your answer.
d.Suppose The Fruit Farm is currently producing at point G.What happens to the opportunity cost of producing more and more apples? Does it increase, decrease, or remain constant? Explain your answer.
e.Suppose The Fruit Farm is plagued by the apple maggot infestation which destroys apple trees but not pear trees.Show in a graph what happens to its PPF.

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Definitions:

Business Decisions

Choices or judgments that are made in the course of managing a business, considering various factors to achieve organizational goals.