Figure 1The production possibility frontierABCDE is a production possibility frontier. It shows the differentcombinations of goods which can be produced if all resources arefully and efficiently utilised. The economy can produce at any pointon the line. It cannot produce at G because the PPF shows themaximum that can be produced. It can produce within the PPF,05such as at F, but less will be produced than the maximum possible.Non-manufactured goods50403020100A10BTiC2030Manufactured goodsGDE40 y frontiersockcty ofhicons ingonTimesUnit 4Question 1The production possibility frontier of an economy is asshown in Figure 1.(a) (i) If the economy produces 15 units of manufactured goods,what is the maximum number of non-manufactured goodsit can produce? (ii) How many manufactured goods could itproduce if production of non-manufactured goods was 50 units?(b) The economy is currently operating at point C. What is theopportunity cost of increasing production of non-manufacturedgoods by (i) 15 units; (ii) 20 units?(c) The economy is at D. What is the marginal cost of increasingproduction of non-manufactured goods to the point (i) C; (ii) B?Growth in tthe quantityfor instanceworkers in tbe built;there is an imake workeallow machiwith the samProductionoutwards. Theexample, war cin the number.output. Some edevastate worl

The Production Prospects Frontier (PPF) is a chart that shows every one of the various mixes of…

Figure 1 The production possibility frontier ABCDE is a production possibility frontier. It shows the different combinations of goods which can be produced if all resources are fully and efficiently utilised. The economy can produce at any point on the line. It cannot produce at G because the PPF shows the maximum that can be produced. It can produce within the PPF,00 such as at F, but less will be produced than the maximum possible. Non-manufactured goods 50 40 30 20 10 0 A 10 B F Ti 20 30 Manufactured goods •G C D E 40

Figure 1 The production possibility frontier ABCDE is a production possibility frontier. It shows the different combinations of goods which can be produced if all resources are fully and efficiently utilised. The economy can produce at any point on the line. It cannot produce at G because the PPF shows the maximum that can be produced. It can produce within the PPF,00 such as at F, but less will be produced than the maximum possible. Non-manufactured goods 50 40 30 20 10 0 A 10 B F Ti 20 30 Manufactured goods •G C D E 40

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter2: Economic Tools And Economic Systems

Section: Chapter Questions

Problem 18PAE

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It is clear that productive inefficiency is a waste since resources are used in a way that produces less goods and services than a nation is capable of. Why is allocative inefficiency also wasteful?
Figure 1 below shows two production possibilies frontiers (PPFs). The solid one isthe original one. The dashed one is the PPF after a technological advance that hasbenefitted only the Y indusry. As an example, think of the invention of fruitpicking robots that benefits only agricultural production and is of no use insoftware production.Figure 2 shows the marginal social benefit (MSB) of X production in terms ofsacrifices of Y. For example, to produce the first unit of X, the society is willing togive up 40 units of Y. For the second unit the socirty is willing to sacrifice only 35units of Y.Before the technological advance:1. What are the marginal social costs (MSCs) of producing the second,third, and the fourth units of X in terms of the sacrifices of Y. Do youremember the reasons for these results?2. What are the allocatively efficient quantities of X and Y?3. Suppose that due to some good news about various health benefits of X,the marginal social benefit of X increases by 10 units…
Figure 1 below shows two production possibilies frontiers (PPFs). The solid one isthe original one. The dashed one is the PPF after a technological advance that hasbenefitted only the Y indusry. As an example, think of the invention of fruitpicking robots that benefits only agricultural production and is of no use insoftware production.Figure 2 shows the marginal social benefit (MSB) of X production in terms ofsacrifices of Y. For example, to produce the first unit of X, the society is willing togive up 40 units of Y. For the second unit the socirty is willing to sacrifice only 35units of Y.Before the technological advance:1. What are the marginal social costs (MSCs) of producing the second,third, and the fourth units of X in terms of the sacrifices of Y. Do youremember the reasons for these results?2. What are the allocatively efficient quantities of X and Y?3. Suppose that due to some good news about various health benefits of X,the marginal social benefit of X increases by 10 units…
please solve d and e Imagine a country XYZ that produces only two goods—chairs and tables. Together, the chairs and tablesindustries use all of the economy’s factors of production. The table below shows the productionpossibilities for XYZ:Production Possibilities for XYZChairs Tables600 0450 150300 250150 325 0 375a. Draw a Production Possibility Frontier for the country using the information in tableabove. b. What is the opportunity cost of increasing chairs production from 450 chairs to 600chairs?c. What is the opportunity cost of increasing tables production from 250 tables to 325tables?d. Plot the point denoting 300 chairs and 300 tables on your graph above. Is this point“feasible”? Why or why not?e. Plot the point denoting 300 chairs and 50 tables on your graph above. Should XYZ beproducing at this point? Why or why not?
POSSIBILITIES PINEAPPLES MANGOESA 100 0B 90 15C 70 30D 40 45E 0 60 1. Graph the production possibility frontier (PPF) placing pineapples on the X axis and mangoes on the Y axis. 2. On PPF curve drawn, identify the following points: i. Unattainable (label the point U) ii. Attainable and efficient (label the point AE) iii. Attainable and inefficient (label the point AI) 3. What does the shape of the PPF curve drawn suggest about the opportunity cost of producing ONE more unit of pineapples or mangoes 4. If mangoes harvesting increases from 15 to 30, what is the opportunity cost of harvesting pineapples? 5. What is the economic significance of choosing to harvest at 25 pineapples and 50 mangoes? 6. With the aid of a diagram, explain the effect of a new technological mobile weather station on…
Imagine a country XYZ that produces only two goods—chairs and tables. Together, the chairs and tablesindustries use all of the economy’s factors of production. The table below shows the productionpossibilities for XYZ:Production Possibilities for XYZChairs Tables600 0450 150300 250150 325 0 375a. Draw a Production Possibility Frontier for the country using the information in tableabove. b. What is the opportunity cost of increasing chairs production from 450 chairs to 600chairs?c. What is the opportunity cost of increasing tables production from 250 tables to 325tables?d. Plot the point denoting 300 chairs and 300 tables on your graph above. Is this point“feasible”? Why or why not?e. Plot the point denoting 300 chairs and 50 tables on your graph above. Should XYZ beproducing at this point? Why or why not?
1. Describe and illustrate what a Production Possibility Frontier (PPF) for a two good economy looks like, which if it used all its resources, can produce either 300 units of national security or 140 units of health care, or some combination of the two. 2. Explain what the opportunity cost is and calculate it for this example (assume constant opportunity cost).
1. Home has 1,200 units of labour available. It can produce two goods, cars and televisions. The unitlabour requirementin car production is 3, while in television production it is 2.(a) Graph Home’s production possibility frontier.(b) What is the opportunity cost of cars in terms of televisions?(c) In the absence of trade, what would be the price of cars in terms of televisions? Why?
Review the numbers for Canada and Venezuelafrom Table 33.12 which describes how many barrelsof oil and tons of lumber the workers can produce. Usethese numbers to answer the rest of this question.a. Draw a production possibilities frontier for eachcountry. Assume there are 100 workers in eachcountry. Canadians and Venezuelans desire bothoil and lumber. Canadians want at least 2,000tons of lumber. Mark a point on their productionpossibilities where they can get at least 3,000tons.b. Assume that the Canadians specializecompletely because they figured out they havea comparative advantage in lumber. They arewilling to give up 1,000 tons of lumber. Howmuch oil should they ask for in return for thislumber to be as well off as they were with notrade? How much should they ask for if theywant to gain from trading with Venezuela? Note:We can think of this “ask” as the relative price ortrade price of lumber.c. Is the Canadian “ask” you identified in (b) alsobeneficial for Venezuelans? Use the…
Below is the production possibilities table for consumer goods (washing machine) andcapital goods (tractor): Type of Production Production Possibilities A B C D E Washing Machine 0 4 8 12 16 Tractor 60 54 42 24 0 a. Show these data graphically.b. If the economy is at point B, what is the cost of one more washing machine?What is the cost of one more tractor?c. Explain how the production possibilities frontier reflects the law ofincreasing opportunity costs.
a) Draw a production possibilities frontier (PPF) for a society that produces two goods, guns and wheat. Suppose this society has two political parties, party R (who want a strong military) and party L (who want a smaller military). Show points on your diagram that party R and party L chooses. b) Show graphically whether your PPF will change if all the resources used for both the goods were equally suitable for production of guns and wheat? c) Assuming that b stands and if all the resources are used for the production of guns, 20 guns can be produced and if all the resources are used for production of wheat, 80 units of wheat can be produced, then what is the opportunity cost of producing one gun?
Suppose the hypothetical economy produces only car and oil using its available resources and existing technology. CombinationsUnitsProduction alternatives ABCDE OilKgs8006004002000 CarNumber0500100015002000 Using the above information, Draw the production possibility frontier/ curve of a nation.If the economy is initially operating at point C, then calculate the opportunity cost producing one more unit of car. What changes are required for the economy to shift PPF either outward or inward?