Atlantis is a small, isolated island in the South Atlantic.The inhabitants grow

ID: 1229201 • Letter: A

Question

Atlantis is a small, isolated island in the South Atlantic.The

inhabitants grow potatoes and catch fresh fish. Theaccompanying

table shows the maximum annual output combinations

of potatoes and fish that can be produced. Obviously, given

their limited resources and available technology, as theyuse

more of their resources for potato production, there arefewer

resources available for catching fish.

a. Draw a production possibility frontier withpotatoes on

the horizontal axis and fish on the vertical axisillustrating

these options, showing points A–F.

b. Can Atlantis produce 500 pounds of fish and800 pounds

of potatoes? Explain. Where would this point lie relative

to the production possibility frontier?

c. What is the opportunity cost of increasingthe annual

output of potatoes from 600 to 800 pounds?

d. What is the opportunity cost of increasingthe annual

output of potatoes from 200 to 400 pounds?

e. Can you explain why the answers to parts cand d are not

the same? What does this imply about the slope of the

production possibility frontier?

table??

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