Chapter 11, Problem 4DQ

A production possibilities frontier is shown below (Z, "Home Goods," on the vertical axis; H, "Health," on the horizontal axis). Suppose that the individual is producing the combination associated with point B, but they prefer to be at point C. Given this information we might say that this combination is ____. A. productively efficient but allocatively inefficient.  B. productively efficient and allocatively efficient.   C. productively inefficient and allocatively inefficient.   D. productively inefficient, but allocatively efficient.

One of the important concepts for understanding cities is “path dependency.” Which of the following best represents the concept of path dependency?   a.  Highways have become necessary for the export and import of goods to cities. b.  Many things that happen in the present are determined by things that happened in the past c. The location of a firm depends upon whether procurement costs or distribution costs are greater   d. Commuters get used to traveling the same way to work

Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes. If the question prompts you to “Calculate,” you must show how you arrived at your final answer. Zeetopia and Freshland are two small tropical islands that use the same amounts of resources to produce mangoes and coconuts as shown in the table below. (d) Assume the two islands experience constant opportunity costs in the production of the two products. Draw a correctly labeled graph illustrating Zeetopia’s and Freshland’s production possibilities, showing coconuts on the horizontal axis and mangoes on the vertical axis. Plot the numerical values from the table above on your graph. (e) On your graph in part (d), show a combination of coconuts and mangoes, labeled as point X that is unattainable for Freshland but feasible and inefficient for Zeetopia.