Problem 4 News Flash: Wliam fails his last economics midterm. He realizes that he has spent too much time on the debate team, and not enough time on his academics. Lets assume he was on point B on the PPF before he failed his midterm. Where should he be on the PPF after he decides to spend more time studying for his classes? What should he do to reach this new polint on the PPF? Problem 5 Technological innovation. A new computer is invented that will help William study more and debate more. Show what happens in the PPF graph from problem 1. Assume that the opportunity cost of studying and debating do not change. And assume the offects of the technological innovation affect debate and studying equally. Label the new PPF as PPF1. Technological devastation. A computer virus devastates William's computer. Willam needs to use the local computer lab on the other side of campus to do his studies and debate research. This is a huge inconvenience for William, so he is unable to study and debate as much as before. Show what happens in the PPF graph from problem 1. Assume that the opportunity cost of studying and debating do not change. And assume the effects of the computer virus affect debate and studying equally. Label the new PPF as PPF2. What are the factors that will shift the PPF? What are the factors that will shift a point along the PPF?
Problem 4 News Flash: Wliam fails his last economics midterm. He realizes that he has spent too much time on the debate team, and not enough time on his academics. Lets assume he was on point B on the PPF before he failed his midterm. Where should he be on the PPF after he decides to spend more time studying for his classes? What should he do to reach this new polint on the PPF? Problem 5 Technological innovation. A new computer is invented that will help William study more and debate more. Show what happens in the PPF graph from problem 1. Assume that the opportunity cost of studying and debating do not change. And assume the offects of the technological innovation affect debate and studying equally. Label the new PPF as PPF1. Technological devastation. A computer virus devastates William's computer. Willam needs to use the local computer lab on the other side of campus to do his studies and debate research. This is a huge inconvenience for William, so he is unable to study and debate as much as before. Show what happens in the PPF graph from problem 1. Assume that the opportunity cost of studying and debating do not change. And assume the effects of the computer virus affect debate and studying equally. Label the new PPF as PPF2. What are the factors that will shift the PPF? What are the factors that will shift a point along the PPF?
Chapter13: General Equilibrium And Welfare
Section: Chapter Questions
Problem 13.3P
Related questions
Question
100%
Transcribed Image Text:Study Units Debate Units
12
11
10
1
William faces the production possibilities frontier located on
your left. He can only choose between studying for his
classes or do debate research. If he only concentrates on his
academics then he will produce 12 "study units" and produce
no "debate units". If he only concentrates on debate then he
will produce 12 "debate units" and produce no "study units".
Lets assume that William is a one-person economy.
3
8.
5
6.
4.
3
10
11
12
Problem 1
Graphically show William's production possibilities frontier. Debate should be on the vertical axis.
Label four polints on the graph: (A) a point inside the PPF: (B) a point on the PPF where debate is
more valued than studying: (C) a point on the PPF where studying is more valued than debate; (D) a
point outside the PPF.
Transcribed Image Text:Problem 4
News Flash: William fails his last economics midtem. He realizes that he has spent too much time
on the debate team, and not enough time on his academics. Lets assume he was on point B on the
PPF before he failed his midterm. Where should he be on the PPF after he decides to spend more
time studying for his classes? What should he do to reach this new point on the PPF?
Problem 5
Technological innovation. A new computer is invented that will help William study more and debate
more. Show what happens in the PPF graph from problem 1. Assume that the opportunity cost of
studying and debating do not change. And assume the effects of the technological innovation affect
debate and studying equally. Label the new PPF as PPF1.
Technological devastation. A computer virus devastates William's computer. William needs to use the
local computer lab on the other side of campus to do his studies and debate research. This is a huge
inconvenience for William, so he is unable to study and debate as much as before. Show what
happens in the PPF graph from problem 1. Assume that the opportunity cost of studying and debating
do not change. And assume the effects of the computer virus affect debate and studying equally.
Label the new PPF as PPF2.
What are the factors that will shift the PPF?
What are the factors that will shift a point along the PPF?
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