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Macroeconomics Module 1 Upload.
2. The following is a production possibilities table for potatoes (lbs) and fish(lbs) in Atlantis, a small island in the South Atlantic.
A B C D E F
Potatoes 1,000 800 600 400 200 0
Fish 0 300 500 600 650 675
a) Draw the production possibilities frontier with potatoes on the horizontal axis and fish on vertical axis illustrating these options, showing points A-F.
b) Can Atlantis produce 500 pounds of fish and 800 pounds of potatoes? Explain. Where would this point lie on the production possibilities curve?
c) What is the opportunity cost of increasing the annual output of potatoes from 600 to 800 lbs?
d) What is the opportunity cost of increasing the annual output of potatoes from 200 to 400lbs?
e) Label point G inside the production possibilities curve. What does it indicate? Label H outside the curve. What does this point indicate? What must occur for the economy to attain the level of production indicated by point H?