Atlantis is a small, isolated island in the south atlantic. the inhabitants grow potatoes
and catch fish. the table below shows the maximum annual output combinations of
potatoes and fish that can be produced. obviously, given their limited resources and
available technology, as they use more of their resources for potato production, there
are fewer resources available for catching fish
maximum annual output quantity of potatoes quantity of fish (pounds)
options
(pounds
a
va
800
600
500
xo
600
200
675
a. draw a production possibility frontier with potatoes in the horizontal axis and fish
on the vertical axis illustrating these options, showing points a-f.
b. can atlantis produce 500 pounds of fish and 800 pounds of potatoes? explain.
where would this point lie relative to the production possibility frontier?
what is the opportunity cost of increasing the annual output of potatoes from 600
to 800 pounds?
d. what is the opportunity cost of increasing the annual output of potatoes from 200
to 400 pounds?
e explain why the answers to parts cand d are not the same? what does this imply
about the slope of the production possibility frontier?