APMacro Unit 1.1-1.4 open response questions

The table shows that if the farmer grows just corn, 100,000 kg can be harvested, but there will be no resources left to grow soybeans. Explain the opportunity cost in this scenario.

If nothing but soybeans are grown, 100,000 kg can be harvested but no corn. Discuss the implications of this choice.

Every 20,000 kg increase in soybean production results in a fall in corn output of 20,000 kg. Analyze this trade-off.

In other words, the opportunity cost of one kg of soybeans is one kg of corn. Explain this concept using the data provided.

Assume Westoverland is currently allocating all of its resources toward tire production (point A). As the country moves from point A to point B, it produces its first 1 million driveshafts and gives up 5 million tires. Explain the opportunity cost involved in this movement.

However, the next 1 million driveshafts (from point B to C) "cost" Westoverland 10 million tires. Discuss how the opportunity cost changes as production shifts from B to C.

As driveshaft production continues to increase, the opportunity cost of additional driveshafts increases. Analyze why this might be the case.

The next million driveshafts (from C to D) cost 15 million tires, and the last million driveshafts (D to E) cost Westoverland 20 million tires. Describe the trend in opportunity costs as Westoverland moves from C to E.

The average opportunity costs of driveshafts ("d") in terms of tires ("t") along Westoverland’s PPC can be calculated as in the following table. Explain how the opportunity cost is calculated for each movement along the PPC.

On Westoverland’s original PPC, an increase of driveshaft production from 2 million to 3 million units (from A to B) would have come at the opportunity cost of 15 million tires.