Suppose that Econistan produces two goods, marshmallows and toothpicks, under conditions of constant opportunity costs. Given its resources, the maximum number of marshmallows that it can make is 1000 pounds, and the opportunity cost of making one additional box of toothpicks is 4 pounds of marshmallows. a) (5 points) What is the maximum amount of toothpicks that Econistan can produce

maximum number of toothpicks to be produced = 250

Explanation:

given data

maximum number of marshmallows = 1000 pounds

opportunity cost = 4 pounds

solution

we get here max no of toothpick that is express as

max no of toothpick = maximum number of marshmallows ÷ opportunity cost one toothpicks        .......................1

put here value

max no of toothpick =

max no of toothpick = 250

maximum number of toothpicks to be produced = 250

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