Question

cmcss economics exam
e.06 8. assume that the company is currently producing nine (9) storage sheds and 200 crab puffs. what would be the additional opportunity cost of producing 250 additional crab puffs?
a 200 crab puffs
b 450 crab puffs
c 9 storage sheds
d 11 storage sheds

Explanation:

Step1: Understand Current Production

Current: 9 storage sheds, 200 crab puffs.

Step2: Find New Crab Puffs

New crab puffs: \( 200 + 250 = 450 \).

Step3: Find Storage Sheds at 450 Crab Puffs

From PPC, at 450 crab puffs, storage sheds = 0 (wait, no—wait, current is 9 sheds, 200 puffs. To get 450 puffs (200 + 250), we look at the PPC. Wait, no: opportunity cost is what's given up. Wait, when producing 450 crab puffs, how many storage sheds? Wait, the y - axis is crab puffs, x - axis storage sheds. At 450 crab puffs, x (storage sheds) is 0? No, wait the graph: when crab puffs are 450, storage sheds are 0? Wait no, the leftmost point: when storage sheds are 0, crab puffs are 450? Wait no, the graph starts at (0, 450) maybe? Wait, the x - axis is storage sheds (0 - 11), y - axis crab puffs (0 - 500). The PPC curve: when storage sheds = 0, crab puffs = 450? When storage sheds = 10, crab puffs = 50? Wait, current production: 9 storage sheds, 200 crab puffs. We need to produce 250 additional crab puffs, so total crab puffs = 200 + 250 = 450. Now, at 450 crab puffs, how many storage sheds? Looking at the PPC, when crab puffs are 450, storage sheds are 0? Wait no, the left end: when storage sheds are 0, crab puffs are 450. So current storage sheds: 9. To get to 450 crab puffs, we need to go from 9 storage sheds to 0 storage sheds? Wait, no—wait, opportunity cost of producing more crab puffs is the storage sheds given up. Current: 9 sheds, 200 puffs. After producing 250 more puffs (total 450), how many sheds? From the graph, at 450 puffs, sheds = 0? Wait, no, maybe I misread. Wait the x - axis is storage sheds (0 to 11), y - axis crab puffs (0 to 500). The curve: when sheds = 0, puffs = 450; when sheds = 10, puffs = 50. So current: 9 sheds, 200 puffs. We need to produce 250 more puffs: 200 + 250 = 450 puffs. At 450 puffs, sheds = 0. So the number of sheds given up is 9 - 0 = 9? Wait, no—wait, current sheds: 9. After producing 450 puffs, sheds: 0. So we give up 9 sheds? Wait, but the options: option C is 9 storage sheds. Wait, let's re - check. Current production: 9 sheds, 200 puffs. We want to produce 250 more puffs (total 450 puffs). To produce 450 puffs, how many sheds? From the PPC, when puffs = 450, sheds = 0. So the opportunity cost is the sheds we give up: 9 - 0 = 9. So the additional opportunity cost of producing 250 more puffs is 9 storage sheds.

Step4: Evaluate Options

Option A: 200 crab puffs – not relevant, we are calculating opportunity cost in terms of storage sheds. Option B: 450 crab puffs – no. Option C: 9 storage sheds – matches our calculation. Option D: 11 storage sheds – no.

Answer:

C. 9 storage sheds