Use the following table to work Problems 21 to 22. Suppose that Yucatan’s production possibilities are Food Sunscreen
Food
Sunscreen
(pounds per month)
(gallons per month)
300
and
200
and
50
100
and
100
and
150
21. a. Draw a graph of Yucatan’s PPF and explain how your graph illustrates a tradeoff.
b. If Yucatan produces 150 pounds of food per month, how much sunscreen must it produce if it achieves production efficiency?
c. What is Yucatan’s opportunity cost of producing 1 pound of food?
d. What is Yucatan’s opportunity cost of producing 1 gallon of sunscreen?
e. What is the relationship between your answers to parts (c) and (d)?
22. What feature of a PPF illustrates increasing opportunity cost? Explain why Yucatan’s opportunity cost does or does not increase.