AB 204 STUDY Education Terms/ab204study.com AB 204 STUDY Education Terms/ab204study.com | Page 4

Second, assume that Alaskan Salmon can also be sold in UK. The
UK demand schedule for salmon is as follows:
Refer to the combined U.S. and UK demand schedule, the U.S.
demand schedule and the supply schedule, and analyze the change
in the market for salmon .What will happen to the price at which
fishermen can sell salmon? What will be the final output of salmon?
After UK joins the market demand for salmon, what will happen to
the price U.S. consumers pay for salmon? What will happen to the
quantity of salmon consumed by U.S. consumers?
3) Assume 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.
Is it feasible for Atlantis to produce 500 pounds of fish and 800
pounds of potatoes? Explain.
Calculate the opportunity cost of increasing the annual output of
potatoes from 800 to 1000 pounds.
Calculate the opportunity cost of increasing the annual output of
potatoes from 400 to 600 pounds.
What is the difference between the answers to parts b and c?
What does the change in opportunity costs indicate about the slope
of the production possibility frontier?