Question

Draw a production possibilities curve for your farm of ten acres between growing apple trees and raising honey bees. Is there a tradeoff between these two? Why? How is the tradeoff shown in your graph? (Make sure you label you axes.)

Answer 1

Maximum land that can be put to production of apples is 10 acres while the maximum land put to raising honey bees is 10 acres. The PPC is concave to the origin showing increasing opportunity cost. As more and more of land is put to apple trees less and less land is available for raising honey bees and the opportunity cost increases. The tradeoff is shown by change in area put to raising honey bees divided by the change in area put to growing apples trees.