Exercise 1

Suppose that there is a change in weather conditions on Jana's island that makes the corn yields much higher.  This enables Jana to produce the following amounts of corn.


Jana's production possibilities are (corn and cloth considered separately):

Hours 
worked / day
either Corn grown
(kg / month)
or Cloth produced
(m / month)
0 0 0
2 60 1
4 100 2
6 120 3
8 130 4
10 140 5

Jana's production possibility frontier (corn and cloth considered together):

  Corn Cloth
  hours / day kg / month hours / month m / month
a 10 140 0 0
b 8 130 2 1
c 6 120 4 2
d 4 100 6 3
e 2 60 8 4
f 0 0 10 5

Jana's PPF (chart)

The opportunity cost of cloth