Below is the production possibility schedule for an economy.
Max. Annual output options Quantity of potatoes (pounds) Quantity of fish (pounds)
A 1000 0
B 800 300
C 600 500
D 400 600
E 200 650
F 0 675
Is it possible to produce 500 lbs fish and 800 lbs potatoes? Why or why not? Explain. (2 marks) What is the opportunity cost of increasing the annual output of potatoes from 600 to 800 lbs? (1 mark) What is the opportunity cost of increasing the annual output of potatoes from 200 to 400 lbs? (1 mark) Suppose the economy is producing 800 lbs of potatoes & 300 lbs of fish. What is the opportunity cost of producing 350 lbs of more fish? (1 mark) Is the combination 600 lbs potatoes & 400 lbs fish efficient? Why or why not? Explain your answer. (2 marks)
