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- While producing on the production possibilities frontier. if additional units of a good could be produced at a constant opportunity cost, the production possibilities frontier would be Select one: O a. boswed outward. O b.a straight line. O c bowed inward. O d. positively sloped.It takes Andy 45 minutes to complete a load of laundry and 15 minutes to wrap a present. It takes Bob 60 minutes to complete a load of laundry and 30 minutes to wrap a present. Which of the following statements is true? Select one : O A. Bob's opportunity cost of doing a load of laundry is wrapping 3 presents. O B. Bob has a comparative advantage in doing laundry. O C. Bob has a comparative advantage in wrapping a present. O D. Andy's opportunity cost of wrapping a present is doing 3 loads of laundry. O E. Bob has an absolute advantage in doing laundry."Only answer c-d ones" (a) Calculate the opportunity cost of producing one additional unit of good x in terms of units of good y in Home and Foreign. The opportunity cost of producing one additional unit of good x in Home or foreign is the amount of good y that must be given up to produce it. At Home, one worker can produce 2 units of good x or 1 unit of good y. Thus, to produce one additional unit of good x, half a unit of good y must be given up. The opportunity cost in Home is 0.5 units of good y. In Foreign, one worker can produce 1 unit of good x or 2 units of good y. To produce one additional unit of good x, two units of good y must be given up. The opportunity cost in Foreign is 2 units of good y. (b) Derive the production possibilities frontier (PPF) for Home and Foreign and plot it in a graph with good x in the horizontal axis and good y in the vertical axis. To derive the production possibilities frontier (PPF) for Home and Foreign, we use the labor market clearing condition…
- Below is a production possibilities table for consumer goods (automobiles) and capital goods (forklifts): a. Show these data graphically. Upon what specifific 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? Explain how the production possibilities curve reflfl ects the law of increasing opportunity costs.c. If the economy characterized by this production possibilities table and curve were producing 3 automobiles and 20 fork lifts, what could you conclude about its use of its available resources?d. What would production at a point outside the production possibilities curve indicate? What must occur before the economy can attain such a level of production?Below is the production possibilities table for consumer goods (maize) and capital goods (tractors):Type of productionProduction possibilities A B C D Emaize 30 27 21 12 0Tractors 0 2 4 6 8i. Show these data graphically. ii. If the economy is at point C, what is the cost of one more unit of maize? iii. Suppose improvement occurs in the technology of producing tractors but not in the technology of producing maize. Draw the new production possibilities curve. iv. Now assume that a technological advance occurs in producing maize but not in producing tractors. Draw the new production possibilities curve. v. Now draw a production possibilities curve that reflects technological improvement in the production of both goods.which one of the following is true about the production possibilities frontier (ppf) o a. the information is perfect o b. large number of buyers and sellers o c. free entry and exit o d. government interference in economic activities
- John is thinking about going to the movies tonight . A ticket costs $ 9 and he will have to cancel his baby - sitting job that pays $ 20 . The total opportunity cost of seeing the movie is O A ) $9 O B ) $29 O C ) Indeterminate O D ) $ 29 minus the benefit of seeing the movieReturn to the example in Figure 2.4. Suppose there is an improvement in medical technology that enablesmore healthcare with the same amount of resources. How would this affect the production possibilities curve and, inparticular, how would it affect the opportunity cost of education?3. Suppose that there are 10 million workers in Canada and that each of these workers can produce either 2 cars or 30 bushels of wheat in a year. a) What is the opportunity cost of producing a car in Canada? What is the opportunity cost of producing a bushel of wheat in Canada? Explain the relationship between the opportunity costs of the two goods. b) Draw Canada’s production possibilities frontier. If Canada chooses to consume 10 million cars, how much wheat can it consume without trade? Label this point on the production possibilities frontier. c) Now suppose that the United States offers to buy 10 million cars from Canada in exchange for 20 bushels of wheat per car. If Canada continues to consume 10 million cars, how much wheat does this deal allow Canada to consume? Label this point on your diagram. Should Canada accept the deal?
- Suppose that an economy produces only 2 goods, beer and pizza. Show a typical production possibilities frontier for this country and use it to define and explain the opportunity cost concept and the concept of increasing opportunity costs. If a technology was invented that made the production of beer much more efficient but had no effect on the production of pizza how would the production possibilities frontier change (show it). While all points on the production possibilities curves maximize production, which point maximizes satisfaction? 1. With reference to a diagram, show and explain how a market, left on its own, will tend toward an equilibrium in which there is neither a surplus nor a shortage of the product. 1. What condition must be met in order to conclude that an economy is maximizing social well-being? Do the equilibriums given by individual markets necessarily lead to the maximization of social well-being (that is, if demand is equal to supply, can you conclude that…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.a Explain the economic link between scarcity, choice and opportunity cost. 1.b Suppose there are two countries (South Africa and Chile) producing two products(Capital goods and consumer goods) with production possibilities per person inSouth Africa lower than in Chile. Use the PPF to substantiate how the future growthof the two countries will change if South Africa devoted a lot of its resources toproducing capital goods today.
