Question

Two important industries on the island of Bermuda are fishing and tourism. According to data from the Food and Agriculture Organization of the United Nations and the Bermuda Department of Statistics, in 2009 the 306 registered fishermen in Bermuda caught 387 metric tons of marine fish. And the 2719 people employed by hotels produced 554,400 hotel stays, measured by the number of visitor arrivals. Suppose that this production point is efficient in production. Assume also that the opportunity cost of 1 additional metric ton of fish is 2000 hotel stays and that this opportunity cost is constant (the opportunity cost does not change). If all 306 registered fishermen were to be employed by hotels, in addition to the 2719 people already working in hotels, how many hotel stays could Bermuda produce?

Answer 1

Bermuda max hotel stays capacity wil be of 1,328,400

Step-by-step explanation:

a metric ton of fish opportunity cost is 2,000 hotel stays. Thus, we multiply the output by their cost in hotel stays and get the additional we could get

Bermuda produced 387 metric tons of fish

opportunity cost per metric ton: 2,000

Additional : 387 x 2,000 = 774,000

Adding the 554,400 hotel stays already offered:

774,000 + 554,400 = 1,328,400 hotel stays