Consider the Production Possibilities Frontier (PPF) where tvs production is defined on x- axis and the production of sandals is defined on the y-axis. If the production plan is on the PPF (in other words is efficient) then the following equation is satisfied (tv s)2+ (sandals)2=25. What is the marginal opportunity cost, in terms of sandals, of producing the fifth (5th) TV?

Consider the Production Possibilities Frontier (PPF) where tvs production is defined on x- axis and the production of sandals is defined on the y-axis. If the production plan is on the PPF (in other words is efficient) then the following equation is satisfied (tv s)2+ (sandals)2=25. What is the marginal opportunity cost, in terms of sandals, of producing the fifth (5th) TV?

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter5: Difficult Cases For The Market And The Role Of Government

Section: Chapter Questions

Problem 7CQ

See similar textbooks

Similar questions

Assume the following: (1) three people go to a restaurant, (2) each person orders a soda for P2 and the group of three orders a large pizza to share for a price of P12 and (3) a fourth person joins the group and orders one soda and is invited to share in eating the pizza. Which of the following statements is false? a. The cost of the fourth person’s soda will be P2. b. The total cost of the four sodas consumed by the group is P 8. c. When the fourth person joined the group the total cost of the large pizza increased to P 16. d. When the fourth person joined the group the average pizza cost per person dropped to P3.
Suppose a tax is set at t’ in the figure. How many units of emissions are ABATED and is abatement achieved cost effectively? Suppose a regulation has just been implemented requiring that coal-fired power plants pay a tax of $80 on each unit of emissions (1 unit is 1 metric ton). Before the tax was imposed, a plant called Old River Power had an emissions level of 100 units. Given a marginal abatement cost function of 200 – 2E, under the tax policy what will Old River Power pay the regulator in emissions taxes?
Suppose total benefits and total costs are given by B(Y) = 150Y − 6Y2. Then marginal benefits are options: 150Y - 6. 150 − 12Y. 150 - 3Y. 6Y.
A firm manufactures two products, each of which must be processed through cutting and finishing departments. The information for the two goods are represented in the table below: Good Type 1 and 2 Good 1 Cutting of material 3 hours per unit Finishing 4 hours per unit Profit Margins R5 per unit Good 2 Cutting of material 4 h per unit Finishing 6 h per unit Profit Margins R6 per unit Total cutting of material 120 hours Total finishing 260 h ours (a) Write down the constraints or inequalities. (b) Write down the objective function. (c) Sketch the graphs of inequalities and shade the feasible region. (d) How many types of each good should be manufactured to maximize profit.
Out of 10000 people in a community, each is willing to pay Ksh 10 for each well dug. The cost of digging the wall is is given by C= Q2+20Q. Calculate the pareto efficiecy number of wells to be dug. If the government want to dug the well at a minimal cost, how many walls will it dig and how much will it spen if the projet is given to a private, profit making organization, how many well would the firm dig?
You manage two chocolate factories. Using only these two factories, you must produce exactly 420 kgs of chocolate daily at lowest possible cost. Mathematically, you have: Q1 = Quantity produced at Chocolate Factory #1 Q2 = Quantity produced at Chocolate Factory #2 Daily total overall production: Q1 – Q2 = 420 At present, each factory produces half the overall requirement. This means that Q1 = 210, Q2 = 210 a) Following your logic , you realize that as long as the marginal cost is different between the two factories, you can lower overall cost while maintaining production at 420 kgs. So, to reduce the overall cost to the lowest possible, you decide to move more than 1 kilogram from one factory to another. As a result, each factory will produce a different quantity of chocolate while the overall daily production remains at 420 kgs. To minimize overall cost, how many kilograms will you order/instruct Factory #1 to produce? Q1 = ____________kgs And how many kilograms would you…
The marginal cost to an individual of undertaking an activity, such as rugby game, increases as additional hours are committed because: Select one: a. firms charge proportionately more for longer activities. b. each additional hour committed to the activity provides the individual with less marginal benefit. c. the first hour committed comes at the cost of the least valued alternative activity forgone, and each hour thereafter requires forgoing more valued alternative activities. d. allocative efficiency is attained only when marginal cost is high. e. of decreasing opportunity cost.
Answer all parts (a)-(g) of this question.Mette has started Mersea Oysters. She aims to export oysters to Germany where she acts as aprice taker. After a couple of nights of calculations she believes that her cost function is givenby C(q) = 100 + 6q + 2q2, where q denotes kilos of oysters harvested. The market price shewill face in Germany is 50 per kilo.(a) [4 marks] Derive Mette’s marginal cost function.(b) [7 marks] Use your result from (a) to determine the profit-maximizing output level.(c) [7 marks] Explain in words why the supply function for a price taker is the same as themarginal cost function.(d) [8 marks] Calculate Mette’s profit. Illustrate marginal cost and profit in a diagram.(e) [8 marks] Now instead assume that the price is 22. Should Mette produce at this price?(f) [8 marks] Assume again that the price is 22 but that the fixed cost of producing (100) issunk and was taken in the previous period. Should Mette produce at this price in this case?(g) [8 marks] Assume again…
Answer all parts (a)-(g) of this question.Mette has started Mersea Oysters. She aims to export oysters to Germany where she acts as aprice taker. After a couple of nights of calculations she believes that her cost function is givenby C(q) = 100 + 6q + 2q2, where q denotes kilos of oysters harvested. The market price shewill face in Germany is 50 per kilo.(a) [4 marks] Derive Mette’s marginal cost function.(b) [7 marks] Use your result from (a) to determine the profit-maximizing output level.(c) [7 marks] Explain in words why the supply function for a price taker is the same as themarginal cost function.(d) [8 marks] Calculate Mette’s profit. Illustrate marginal cost and profit in a diagram.(e) [8 marks] Now instead assume that the price is 22. Should Mette produce at this price?(f) [8 marks] Assume again that the price is 22 but that the fixed cost of producing (100) issunk and was taken in the previous period. Should Mette produce at this price in this case?(g) [8 marks] Assume again…
how to find the oppotunity cost if given the PPF equation => 9x^2 + y^2 = 81; which we must find the oppotunity cost in tems of y if we go fom 1 unit of x to 2 units of x
. Appalachian Coal Mining believes that it can increase labor productivity and, therefore, net revenue by reducing air pollution in its mines. It estimates that the marginal cost function for reducing pollution by installing additional capital equipment is MC=40P Where P represents a reduction of one unit of pollution in the mines. It also feels that for every unit of pollution reduction the marginal increase in revenue (MR) is MR=1000-10P How much pollution reduction should Appalachian Coal Mining undertake?
Appalachian Coal Mining believes that it can increase labor productivity and, therefore, net revenue by reducing air pollution in its mines. It estimates that the marginal cost function for reducing pollution by installing additional capital equipment is MC = 40P where P represents a reduction of one unit of pollution in the mines. It also feels that for every unit of pollution reduction, the marginal increase in revenue (MR) is MR = 1,000 - 10P How much pollution reduction should Appalachian Coal Mining undertake?