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Question
Table 2-5| Possible Output Combinations | Shrimp (thousands of pounds) | Oysters (thousands of pounds) |
| A | 35 | 0 |
| B | 30 | 20 |
| C | 25 | 35 |
| D | 20 | 47 |
| E | 15 | 57 |
| F | 10 | 64 |
| G | 5 | 68 |
| H | 0 | 70 |
Refer to Table 2-5. The Shellfish Shack produces only shrimp and oysters. The table aboveshows 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?
Answer
This answer is hidden. It contains 414 characters.
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