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Jon has 5 fields, in which he may grow a mix of tobacco or corn. The maximum amo

ID: 1182632 • Letter: J

Question

Jon has 5 fields, in which he may grow a mix of tobacco or corn. The maximum amount of each crop that may be grown in each field is shown below. Each field has constant costs. Calculate the opportunity cost per unit of tobacco in: Jon produces only corn. In which order should be switch fields from corn to tobacco to maximum production ? Clearly explain the strategy he should follow. Carefully and accurately graph the farm's production possibility frontier (ppf) in the space below. Label it PPF1. Do not attach separate bits of paper. At Point X on the ppf. Giles can produce 70 units of corn and units of tobacco. Plot Point X on your diagram It should be on the production possibility frontier! Now a new chemical is developed that dramatically raises tobacco leaf yield. Describe unambiguously how this would affect the position of the ppf? Graph the new ppf on the diagram above Label it PPF2

Explanation / Answer

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