Marginal Cost - Benefit

	Ethanol	Food Production
	(barrels per day)	(tons per day)
A	150	0
B	140	10
C	120	20
D	90	30
E	50	40
F	0	50

Brazil produces ethanol from sugar and the land used to grow sugar can be used to grow food crops. Suppose that Brazil’s production possibilities for ethanol and food crops are as follow:

1) Using the data given above and below, draw the marginal benefit and marginal cost curves.

Food Production	Willingness to Pay
(tons per day)	(Barrels for each ton of food)
5	5
15	4
25	3
35	2
45	1

2) At what pointof PPF is allocative efficiency achieved and explain, why??