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. If Brazil increases ethanol production from 40 barrels per day to 54 barrels a day, what is the opportunity cost of the additional ethanol?
b. If Brazil increases food production from 2 tonnes per day to 3 tonnes per day, what is the opportunity cost of the additional food?
c. What is the relationship between your answers to parts (a) and (b)?