4. Shifts in production possibilities Suppose the fictional country of Haleakala produces two types of goods: agricultural and capital. The following diagram shows its CL possibilities frontier for rye, an agricultural good, and electric generators, a capital good. Drag the production possibilities frontier (PPF) on the graph to show the effects of a time-saving innovation in the manufacturing of generators. Note: Select either end of the curve on the graph to make the endpoints appear. Then drag one or both endpoints to the desired por snap into position, so if you try to move a point and it snaps back to its original position, just drag it a little farther.

4. Shifts in production possibilities Suppose the fictional country of Haleakala produces two types of goods: agricultural and capital. The following diagram shows its CL possibilities frontier for rye, an agricultural good, and electric generators, a capital good. Drag the production possibilities frontier (PPF) on the graph to show the effects of a time-saving innovation in the manufacturing of generators. Note: Select either end of the curve on the graph to make the endpoints appear. Then drag one or both endpoints to the desired por snap into position, so if you try to move a point and it snaps back to its original position, just drag it a little farther.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter2: Thinking Like An Economist

Section: Chapter Questions

Problem 3PA

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Consider the graph. Suppose the economy is currently at a point E on the production possibilities curve producing a units of services and b units of goods. After technological development raises the maximum amount of goods that can be produced by the economy, the economy moves to point E', producing a' and b' units of services and goods respectively. Which of the following situation is possible? Select all that apply. a. At E', a' = a and b' > b b. At E', a' > a and b' = b c. At E', a' > a and b' > b d. At E', a' < a and b' > b e. At E', a' < a and b' < b
(Figure 15.10) At point G, the marginal cost of a pancake is 50 cents and the marginal cost of a bowl of cereal is also fifty cents. At this point, consumers are willing to trade 2 bowls of cereal for an additional pancake. Which of the following statements is (are) TRUE? Select one: A. The economy is achieving output efficiency because the MRT equals 1. B. The economy is not achieving output efficiency because the MRS is less than the MRT. C. The economy is not allocating its inputs efficiently. D. The economy is not achieving output efficiency because the MRS is greater than the MRT. the correct answer is B, please explain why?
4. a. Suppose that you are on a deserted island and can produce either 32 tons of coconuts OR 16 tons of pineapples. Draw the PPF representing this situation. Assume that coconuts are on the x-axis. Also assume that the PPF is linear. Clearly label your graph. b. For each of the following combinations say whether they are attainable (feasible) or unattainable (infeasible), based on the above information. If they are feasible, say whether they are efficient or inefficient. Also, label the three points on the graph above. (i) 8 tons of coconuts and 12 tons of pineapples: (ii) 16 tons of coconuts and 3 tons of pineapples:
The following is a production possibilities table for war goods and civilian goods: Production alternatives A B C D E Automobiles 0 2 4 6 8 (in millions) Guided missiles 30 27 21 12 0 (in thousands) •Show these production possibilities data graphically. •What does points on the curve indicate? •If the economy is currently at point C, what is the cost of 1 million more automobiles? Of more guided missiles? •Suppose improvement occurs in the technology of producing guided missiles but not in the production of automobiles. Draw the new production possibilities curve
Refer to the following production possibilities table for consumer goods (automobiles) and capital goods (forklifts): a. Show these data graphically. Upon what specific assumptions is this production possibilities curve based? b. If the economy is at point C, what is the cost of one more automobile? Of one more forklift? Which characteristic of the production possibilities curve reflects the law of increasing opportunity costs: its shape or its length? c. If the economy characterized by this production possibilities table and curve were producing 3 automobiles and 20 forklifts, what could you conclude about its use of its available resources? d. Is production at a point outside the production possibilities curve currently possible? Could a future advance in technology allow production beyond the current production possibilities curve? Could international trade allow a country to consume beyond its current production possibilities curve?
Suppose you won $15 on a lotto ticket at the local 7-Eleven and decided to spend all the winnings on candy bars and bags of peanuts. The price of candy bars is $.75 and the price of peanuts is $1.50. Plot the data in your table as a budget line in a graph. What is the slope of the budget line? What is the opportunity cost of one more candy bar? Of one more bag of peanuts? Do these opportunity costs rise, fall, or remain constant as each additional unit of the product is purchased?
2. Which of the following is not an assumption that underlies an economy's production possibilities curve? A. fixed income B. fixed resources C. unchanged technology D. fully employed resources
Assume an economy producing only two goods (shoes and computers) with a fixed amount of productive resources and technology and employing all its productive resources to the maximum. The maximum output combinations of both goods are given in the table below: Combination Shoes ComputersShoes ComputersA 0 1000B 100 900C 200 750D 300 550E 400 300F 500 0 i. Draw the PPF using your knowledge about the shape and slope of PPC.ii. Does the PPF have the expected shape? iii. Explain why your PPF in (a) above depicts that shape.iv. How many computers could society produce if it was willing to do without shoes?v. Why are points outside the frontier unattainable?vi. Identify three ways by which the economy can attain the level of production outside the PPF. vii. What happens to the PPF when technological change overwhelmingly favours the production of computers?viii. What happens to the PPF when the economy discovers an improved technology for producing shoes?
10- Which of the following deals with Lionel Robbins definition of economics? a. behavior associated with using limited and scarce resources. b. None of these c. the distribution of surplus goods to those in need. d. ways to reduce wants to remove the problem of scarcity.