Question: Brazil produces ethanol from sugar, and the land used to grow sugar can be used to grow food crops. The table sets out Brazil's production possibilities for ethanol and food crops:
Ethanol Food crops
(barrels per day) (tonnes per day)
70 and 0
64 and 1
54 and 2
40 and 3
22 and 4
0 and 5
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?