Production Possibility Frontiers: potatoes and corn
(1 point) Draw a production possibilities curve for your farm of
ten acres between growing potatoes and growing corn. Is there a
tradeoff between these two? Why? How is the tradeoff shown in your
graph? (Make sure you label you axes.)
(1 point) Is the PPF line meaningful? Can your farm produce
outside (above) the line? Why or why not? Will you produce inside
the line? Why or why not?
(1 point) What is the cost of growing potatoes? What is the cost
of growing corn? Where are these costs shown in your graph?
(1 point) What happens to the production possibilities frontier
if you dig a new irrigation line to water your land? What happens
to the PPF if you get a new fertilizer system that makes it easier
to grow corn (but has no effect on potatoes)? What if a new South
American beetle arrives that eats potatoes but does not bother
(1 point) What happens if you discover an Old Indian Trick (OIT)
where you can grow potatoes and corn together so that the potatoes
keeps out weeds and and help the corn grow while the corn protects
the potatoes from bugs. Show the new PPF. Does this mean that we
can have “free lunch”?