please answer question number 3 only Use the following information to work Problems 1 to3. Brazil produces ethanol from sugar, and the landused to grow sugar can be used to grow food crops.Suppose that Brazil's production possibilities forethanol and food crops are as followsEthanol(barrels per day)70645440220andandandandandandFood crops(tons per day)0121. a. Draw a graph of Brazil's PPF and explain howyour graph illustrates scarcity.b. If Brazil produces 40 barrels of ethanol a day,how much food must it produce to achieveproduction efficiency?c. Why does Brazil face a tradeoff on its PPF?2. a. If Brazil increases its production of ethanolfrom 40 barrels per day to 54 barrels per day,what is the opportunity cost of the additionalethanol?b. If Brazil increases its production of food cropsfrom 2 tons per day to 3 tons per day, what isthe opportunity cost of the additional food?c. What is the relationship between your answersto parts (a) and (b)?3. Does Brazil face an increasing opportunity cost ofethanol? What feature of Brazil's PPF illustratesincreasing opportunity cost?

Opportunity cost refers to the cost you sacrifice in order to choose the best alternative for you.…

Answered: part 3. Does Brazil face an increasing…

part 3. Does Brazil face an increasing opportunity cost of ethanol? What feature of Brazil's PPF illustrates increasing opportunity cost?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Welfare analysis of the society is related to welfare economics. From the economic point of view former welfare economics refers to that subject which uses the techniques of microeconomics to analyse and evaluate the welfare at the economic or aggregate level.

Question

please answer question number 3 only

Use the following information to work Problems 1 to
3. Brazil produces ethanol from sugar, and the land
used to grow sugar can be used to grow food crops.
Suppose that Brazil's production possibilities for
ethanol and food crops are as follows
Ethanol
(barrels per day)
70
64
54
40
22
0
and
and
and
and
and
and
Food crops
(tons per day)
0
1
2
1. a. Draw a graph of Brazil's PPF and explain how
your graph illustrates scarcity.
b. If Brazil produces 40 barrels of ethanol a day,
how much food must it produce to achieve
production efficiency?
c. Why does Brazil face a tradeoff on its PPF?
2. a. If Brazil increases its production of ethanol
from 40 barrels per day to 54 barrels per day,
what is the opportunity cost of the additional
ethanol?
b. If Brazil increases its production of food crops
from 2 tons per day to 3 tons per day, what is
the opportunity cost of the additional food?
c. What is the relationship between your answers
to parts (a) and (b)?
3. Does Brazil face an increasing opportunity cost of
ethanol? What feature of Brazil's PPF illustrates
increasing opportunity cost?

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