Farmer Jackson has a 50 acre plot which can produce cabbages and soybeans. He sells them to the town
Question: Farmer Jackson has a 50 acre plot which can produce cabbages and soybeans. He sells them to the townsfolk who live in the vicinity. The following is a production possibility table for the cabbages and the soybeans.
| Type of Product | Production Alteration | ||||||||||
| A | B | C | D | E | F | ||||||
| Cabbages (in tons) | 1500 | 1200 | 900 | 600 | 300 | 0 | |||||
| Soybeans (in tons) | 0 | 100 | 180 | 240 | 280 | 300 | |||||
a) What is the cost of one more ton of soybean if the economy is presently at point B? What is the cost of one more ton of soybeans if the economy is presently at point C? How do these answers illustrate the law of increasing opportunity cost?
b) What is the cost of one more ton of cabbages if the economy is at point D?
c) How would it be possible for Farmer Jackson to produce 1000 tons of cabbage and 200 tons of soybeans at the same time? What might cause him to produce a combined output of 300 tons of cabbages and 100 tons of soybeans?
d) What steps must Farmer Jackson take in order to expand his PPF (Production Possibility Frontier)?
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