Big Oaks can produce either paper products or lumber with each tree that they harvest. Because Big Oaks can adjust the amo paper products and lumber they produce from the harvested trees, paper products and lumber are produced in variable prop The above table summarizes Big Oaks production possibilities from each harvested tree.
-Refer to the table above. Suppose the profit for each unit of paper product is $3.00 and the profit for each unit of lumber is $13.50 and Big Oaks is producing the profit- maximizing quantity of lumber and paper products. If the profit from each unit of paper product increases from $3.00 to $4.00 and the profit for each unit of lumber does not change, to maximize profit, Big Oaks should produce a______ proportion of paper products and produce _______ units of paper products and lumber.
A)greater; less
B)smaller; more
C)smaller; less
D)greater; more

Question

Big Oaks can produce either paper products or lumber with each tree that they harvest. Because Big Oaks can adjust the amo paper products and lumber they produce from the harvested trees, paper products and lumber are produced in variable prop The above table summarizes Big Oaks production possibilities from each harvested tree.
-Refer to the table above. Suppose the profit for each unit of paper product is $3.00 and the profit for each unit of lumber is $13.50 and Big Oaks is producing the profit- maximizing quantity of lumber and paper products. If the profit from each unit of paper product increases from $3.00 to $4.00 and the profit for each unit of lumber does not change, to maximize profit, Big Oaks should produce a______ proportion of paper products and produce _______ units of paper products and lumber.
A)greater; less 
B)smaller; more 
C)smaller; less 
D)greater; more

Quizplus · Accepted Answer

When the profit from each unit of paper products increases, it becomes more profitable for Big Oaks to produce paper products relative to lumber, assuming the cost of production and other factors remain constant. Therefore, to maximize profit, Big Oaks should produce a greater proportion of paper products. Since they are shifting production towards the more profitable paper products, they will produce more units of paper products and, consequently, fewer units of lumber to allocate resources efficiently.

Big Oaks Can Produce Either Paper Products or Lumber with Each