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1、ProblemsandApplications1.Inthetextexampleofthefarmerandtherancher,thefarmer’sopportunitycostofproducingonepoundofmeatistwopoundsofpotatoesbecauseforevery20hoursofwork,hecanproduceonepoundofmeatortwopoundsofpotatoes.Withlimitedtimeathisdisposal,producingapoundofmeatmeanshegivesu
2、ptheopportunitytoproducetwopoundsofpotatoes.Similarly,therancher’sopportunitycostofproducingonepoundofmeatis1/8poundofpotatoesbecauseforeveryhourofwork,shecanproduceonepoundofmeator1/8poundofpotatoes.Withlimitedtimeatherdisposal,producingapoundofmeatmeansshegivesuptheopportunit
3、ytoproduce1/8poundofpotatoes.2.a.SeeFigure3-2.IfMariaspendsallfivehoursstudyingeconomics,shecanread100pages,sothatistheverticalinterceptoftheproductionpossibilitiesfrontier.Ifshespendsallfivehoursstudyingsociology,shecanread250pages,sothatisthehorizontalintercept.Thetimecostsar
4、econstant,sotheproductionpossibilitiesfrontierisastraightline.Figure3-2b.IttakesMariatwohourstoread100pagesofsociology.Inthattime,shecouldread40pagesofeconomics.Sotheopportunitycostof100pagesofsociologyis40pagesofeconomics.3.a.Workersneededtomake:OneCarOneTonofGrainU.S.1/41/10J
5、apan1/41/5b.SeeFigure3-3.With100millionworkersandfourcarsperworker,ifeithereconomyweredevotedcompletelytocars,itcouldmake400millioncars.SinceaU.S.workercanproduce10tonsofgrain,iftheU.S.producedonlygrainitwouldproduce1,000milliontons.SinceaJapaneseworkercanproduce5tonsofgrain,if
6、Japanproducedonlygrainitwouldproduce500milliontons.Thesearetheinterceptsoftheproductionpossibilitiesfrontiersshowninthefigure.Notethatsincethetradeoffbetweencarsandgrainisconstant,theproductionpossibilitiesfrontierisastraightline.Figure3-3c.SinceaU.S.workerproduceseither4carsor
7、10tonsofgrain,theopportunitycostof1caris2½tonsofgrain,whichis10dividedby4.SinceaJapaneseworkerproduceseither4carsor5tonsofgrain,theopportunitycostof1caris11/4tonsofgrain,whichis5dividedby4.Similarly,theU.S.opportunitycostof1tonofgrainis2/5cars(4dividedby10)andtheJapaneseopportu
8、nitycostof1tonofgrainis4/5cars(4dividedby5).Thisgivest
