Figure 2-3
Tonnes
of
Soybeans
-A farmer has 100 hectares of land on which he can grow either soybeans or corn.A hectare of land yields 200 tonnes of soybeans or 100 tonnes of corn.Figure 2-3 shows the farmer's

Question

Figure 2-3
Tonnes
of
Soybeans 
-A farmer has 100 hectares of land on which he can grow either soybeans or corn.A hectare of land yields 200 tonnes of soybeans or 100 tonnes of corn.Figure 2-3 shows the farmer's

Quizplus · Accepted Answer

Figure 2-3 shows the production possibilities curve (PPC) for the farmer. The PPC illustrates the different combinations of soybeans and corn that can be produced with the given resources and technology. The farmer can produce either soybeans or corn or a combination of both. The slope of the PPC indicates the opportunity cost of producing one good in terms of the other. In this case, the slope shows that producing 1 tonne of soybeans means giving up the opportunity to produce 0.5 tonnes of corn. Therefore, the farmer should choose the combination of soybeans and corn that is on the PPC and suits their production goals and market demand.

Figure 2-3 Tonnes