Construction possibilities frontier is bowed out

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Reference no: EM1321365

Q. Sam farms a 400-acre farm. Two hundred acres of the ground are particularly rich in a nutrient that is favorable to growing corn but has no profit for wheat. Sam can grow 30 bushels of corn or 25 bushels of wheat on each of these unique acres. The other 200 acres are not rich in the nutrient, so Sam can grow only 10 bushels of corn or the same 25 bushels of wheat per acre.

When a construction possibilities frontier is bowed out, away from the origin the opportunity cost of a good.

Assume that Sam considers starting with all of his ground in corn. After that he thinks about increasing the amount of wheat that he grows. Illustrate what is the occasion cost in bushels of corn of the 1st bushel of wheat that he grows?

Reference no: EM1321365

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