to Scenario 3. What would have to occur for three huts to be produced along with 100 coconuts? Some form of economic growth or technological improvement would have to occur. Diff: 2 Skill: Analytical Topic: Economic growth AACSB: Refer to the information provided in Scenario 4 below to answer the questions that follow. SCENARIO 4: Suppose that a state needs to build both prisons and schools with a budget limited to 10 million dollars. Schools cost $1 million each to build and prisons cost $2 million each to build. Refer to Scenario 4. What is the maximum number of schools that can be built? The maximum number of prisons? Ten is the maximum number of schools and five is the maximum number of prisons. Diff: 2 Analytical Topic: Production possibilities AACSB: Refer to Scenario 4. Draw the state’s production possibilities frontier for the trade-off between schools and prisons. Diff: 2 Skill: Analytical Topic: Production possibilities AACSB: Refer to Scenario 4. What is the opportunity cost of building one more prison? The opportunity cost of building one more prison is two schools. This is gleaned from the fact that the opportunity cost of 5 prisons is 10 schools or 5P = 10S. Solving for P leaves you with 2S or two schools Diff: 2 Skill: Analytical Topic: Opportunity cost AACSB:
to Scenario 3. What would have to occur for three huts to be produced along with 100 coconuts? Some form of economic growth or technological improvement would have to occur. Diff: 2 Skill: Analytical Topic: Economic growth AACSB: Refer to the information provided in Scenario 4 below to answer the questions that follow. SCENARIO 4: Suppose that a state needs to build both prisons and schools with a budget limited to 10 million dollars. Schools cost $1 million each to build and prisons cost $2 million each to build. Refer to Scenario 4. What is the maximum number of schools that can be built? The maximum number of prisons? Ten is the maximum number of schools and five is the maximum number of prisons. Diff: 2 Analytical Topic: Production possibilities AACSB: Refer to Scenario 4. Draw the state’s production possibilities frontier for the trade-off between schools and prisons. Diff: 2 Skill: Analytical Topic: Production possibilities AACSB: Refer to Scenario 4. What is the opportunity cost of building one more prison? The opportunity cost of building one more prison is two schools. This is gleaned from the fact that the opportunity cost of 5 prisons is 10 schools or 5P = 10S. Solving for P leaves you with 2S or two schools Diff: 2 Skill: Analytical Topic: Opportunity cost AACSB: