Question

A village has ten tractors that are used by twenty farmers. Much of the land is uncultivated and farmers are idled by the lack of equipment. Because of the tractor sharing constraints, each farmer is only capable of working 100 hours per month to grow crops. This village produces two products, tomatoes, and corn. The following table displays the greatest possible combinations of these two products (in bushels).

Corn 1000	Tomatoes 0
900	50
800	100
700	150
600	200
500	250
400	300
300	350
200	400
100	450
0	500

1. Draw the Production Possibilities curve with corn on the Y axis and tomatoes on the X axis.
2. What is the opportunity cost of producing an extra 50 bushels of corn?
3. What is the opportunity cost of producing an extra 200 bushels of tomatoes?
4. Is a combination of 300 bushels of corn and 200 bushels of tomatoes attainable? Where would this lie in relation to the PPF curve? Is this efficient?
5. Is a combination of 500 bushels of corn and 250 bushels of tomatoes attainable? Where would this lie in relation to the PPF curve? Is this efficient?
6. What about a combination of 600 bushels of corn and 300 bushels of tomatoes? Where would this lie in relation to the PPF curve? Is this efficient?
7. What would it take to grow 750 bushels of corn and 375 bushels of tomatoes? Draw the new PPF curve with these new constraints.

Answer 1