Question

Answer all the questions.
Only handwritten work will be liked. I don't need typed solutions. Do right work

1. SCENARIO 1: Consider the following data for the harvest of crabs versus the harvest of fish off the coast of Virginia in answering the following questions. (2 Marks) Combination Fish Crabs 40 a. Refer to Scenario 1. Graph the production possibilities frontier and calculate the average opportunity cost of any of the first fifteen crabs produced, Crabs + - - -L B 0 40 70 90100 Fish b. Refer to Scenario 1. What is the economic significance of 25 fish captured and 25 crabs captured? c. Refer to Scenario 1. Explain how this economy might be able to produce 45 fish and 45 crabs? d. Refer to Scenario 1. If this economy is currently producing 30 crabs and 40 fish how is it possible for it to produce more of both? e. Refer to Scenario 1. Assume this economy could either be at Point B or Point C. From which of these points is it more costly to produce more crabs? Explain your answer.

Answer 1

2) Aug opprest of forst isnabs=4 - 0.667 fish - When as lish 425 craks are captured it means mon - can be produced. Thus there is under utilisation of resources. With Gwen resources economy cont produne 45 fish 4 45 crabs. cines there should be an increase in resourers or an advancement of technology Both can be increased by coptimally utilesing of resources. At point c. it is more costly to produce ciobs ble of increasing marginal opportunity cost.