Essay about Macroeconomics

2375 Words 10 Pages
Assignment

General Instructions:

1. Your assignment should have a cover sheet with the following information:

a. your name; b. the course number; c. the section number; and, d. the date,

2. You may either copy and paste the questions and the appropriate graphs into your paper, or you may insert your coversheet, your answers and your references into THIS document, renaming it as required in the instructions.

3. To any graphs, or charts, you may add whatever arrows or other indicators that you feel are necessary to illustrate your analysis.

4. Your answers should follow the APA format by being in double spaced paragraph format, with citations to your sources and, at the bottom of your last
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Atlantis is a small, isolated island in the South Atlantic. The inhabitants grow potatoes and catch fresh fish. The accompanying table shows the maximum annual output combinations of potatoes and fish that can be produced. Obviously, given their limited resources and available technology, as they use more of their resources for potato production, there are fewer resources available for catching fish.

Maximum annual output options

Quantity of potatoes Quantity of fish

(pounds) (pounds)

A 1,000 0

B 800 300

C 600 500

D 400 600

E 200 650

F 0 675

a. Examine the Maximum annual output options table above and the resulting Production Possibility Frontier Graph below and answer parts b - f.

Production Possibility Frontier Graph

[pic]

b. Can Atlantis produce 500 pounds of fish and 800 pounds of potatoes? (5 points) Explain. (5 points) No, Atlantis cannot produce 500 pounds of fish and 800 pounds of potatoes. If Atlantis produces 500 pounds of fish the maximum amount of potatoes it can produce is 600 pounds. The 800 pounds of potatoes would lie outside the production possibility frontier.

c. What is the opportunity cost of increasing the annual output of potatoes

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