AB 204 Unit 3 Assignment Supply and Demand Model and PPF AB 204 Unit 3 Assignment Supply and Demand Model a | Page 2

Referring to the schedules of supply and demand, what is the
equilibrium price of Salmon? What is the equilibrium quantity of
salmon demanded and supplied at the equilibrium price?
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?