The prairie dog has always been considered a problem for American cattle ranchers. They dig holes that cattleand horses can step in and they eat grass necessary for cattle. Recently, ranchers have discovered that there isa demand for prairie dogs as pets. In some areas prairie dogs can sell for as high as $150. Cattlemen are nowfencing off prairie dog towns on their land so these towns will not be disturbed by their cattle.Draw a production possibilities frontier showing a rancher's production option between cattle production andprairie dog production showing increasing opportunity cost and show what would happen in each of thefollowing situations. (Use a separate graph for each situation.) d. The government grants new leases to ranchers, giving them 10,000 new acres of grassland each for grazing.e. A drought destroys most of the available grass for grazing of cattle, but not for prairie dogs since they alsoeat plant roots.

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d. The government grants new leases to ranchers, giving them 10,000 new acres of grassland each for grazing. e. A drought destroys most of the available grass for grazing of cattle, but not for prairie dogs since they also eat plant roots.

d. The government grants new leases to ranchers, giving them 10,000 new acres of grassland each for grazing. e. A drought destroys most of the available grass for grazing of cattle, but not for prairie dogs since they also eat plant roots.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter4: Demand, Supply, And Market Equilibrium

Section: Chapter Questions

Problem 12P

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Question

The prairie dog has always been considered a problem for American cattle ranchers. They dig holes that cattle
and horses can step in and they eat grass necessary for cattle. Recently, ranchers have discovered that there is
a demand for prairie dogs as pets. In some areas prairie dogs can sell for as high as $150. Cattlemen are now
fencing off prairie dog towns on their land so these towns will not be disturbed by their cattle.
Draw a production possibilities frontier showing a rancher's production option between cattle production and
prairie dog production showing increasing opportunity cost and show what would happen in each of the
following situations. (Use a separate graph for each situation.)

d. The government grants new leases to ranchers, giving them 10,000 new acres of grassland each for grazing.
e. A drought destroys most of the available grass for grazing of cattle, but not for prairie dogs since they also
eat plant roots.

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The prairie dog has always been considered a problem for American cattle ranchers. They dig holes that cattle and horses can step in, and they eat grass necessary for cattle. Recently, ranchers have discovered that there is a demand for prairie dogs as pets. In some areas, prairie dogs can sell for as high as $150 each. Cattlemen are now fencing off prairie dog towns on their land so these towns will not be disturbed by their cattle. Draw a rancher’s production possibilities frontier showing increasing opportunity cost of cattle production in terms of prairie dog production. Using a separate graph for each situation, show what would happen to the initial production possibilities frontier in each of the following situations:
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