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Question: In Problem, what is the marginal cost of 1 kilogram of food in Yucatan when the quantity produced is 150 kilograms per day? What is special about the marginal cost of food in Yucatan?
Problem: Suppose that Yucatan's production possibilities are:
Food Sunscreen(kilograms per month) (litres per month)
300 and 0
200 and 50
100 and 100
0 and 150
a. Draw a graph of Yucatan's PPF and explain how your graph illustrates a tradeoff.
b. If Yucatan produces 150 kilograms of food per month, how much sunscreen must it produce if it achieves production efficiency?
c. What is Yucatan's opportunity cost of producing (i) 1 kilogram of food and (ii) 1 litre of sunscreen?
d. What is the relationship between your answers to part (c)?
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