MICROECONOMICS W/CONNECT
21st Edition
ISBN: 9781260316063
Author: McConnell
Publisher: MCG
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Chapter 1.2, Problem 1QQ
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Draw a production possibilities model with 4 points labelled A, B, C, D, one inside, two on, and one outside the production possibilities curve. Explain the 4 points in terms of scarcity, choice and efficiency.
a. According to economic theory, society makes an important tradeoff between scarcity,
choice and opportunity costs. Carefully discuss this tradeoff with relevance to health
economics.
b. A reputable doctor quits his job, which pays $77,000 a year, to open a non-governmental organization (NGO) to serve the needs of orphans. His annual expenses for the NGO amounts to $62,700 for food and daily supplies $9,400 for maintenance, and $1,800 for books.
i. What is his opportunity cost of opening the NGO? (Show working)
ii. What core economic principles are considered in the doctor’s decision making?
A production possibilities curve can shift inward if there is
a. an increase in productivity
b. an increase in unemployment
c. an increase in the price of raw materials
d. a misallocation of resources
e. a natural disaster
Chapter 1 Solutions
MICROECONOMICS W/CONNECT
Ch. 1.2 - Prob. 1QQCh. 1.2 - Prob. 2QQCh. 1.2 - Prob. 3QQCh. 1.2 - Prob. 4QQCh. 1.A - Prob. 1ADQCh. 1.A - Prob. 2ADQCh. 1.A - Prob. 3ADQCh. 1.A - Prob. 1ARQCh. 1.A - Prob. 2ARQCh. 1.A - Prob. 1AP
Ch. 1.A - Prob. 2APCh. 1.A - Prob. 3APCh. 1.A - Prob. 4APCh. 1.A - Prob. 5APCh. 1.A - Prob. 6APCh. 1.A - Prob. 7APCh. 1.A - Prob. 8APCh. 1 - Prob. 1DQCh. 1 - Prob. 2DQCh. 1 - Prob. 3DQCh. 1 - Prob. 4DQCh. 1 - Prob. 5DQCh. 1 - Prob. 6DQCh. 1 - Prob. 7DQCh. 1 - Prob. 8DQCh. 1 - Prob. 9DQCh. 1 - Prob. 10DQCh. 1 - Prob. 11DQCh. 1 - Prob. 1RQCh. 1 - Prob. 2RQCh. 1 - Prob. 3RQCh. 1 - Prob. 4RQCh. 1 - Prob. 5RQCh. 1 - Prob. 6RQCh. 1 - Prob. 7RQCh. 1 - Prob. 1PCh. 1 - Prob. 2PCh. 1 - Prob. 3PCh. 1 - Prob. 4PCh. 1 - Prob. 5PCh. 1 - Prob. 6PCh. 1 - Prob. 7PCh. 1 - Prob. 8P
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- Q. How would the following events be shown using production possibilities curve [ please draw diagram] for shelter and food? a. The economy is experiencing double digit unemployment? b. Economic growth is increasing at over 5 percent per year. c. Society decides it wants less shelter and more food. d. Society wants more shelter and less food.arrow_forwardG, 1 michael has spent 100 000 of his personal savings to start up the business. he could have earned a 15 percent return from his savings. what is the opportunity cost for the business?arrow_forward(h) sugar industry is a subject matter of micro economics. Give reason. (i) what do you mean by alternative uses of resources? (k) unemployment in India is a subject matter of microeconomics or macroeconomics, give reason.arrow_forward
- Your opportunity cost of going to a movie isa. the price of the ticket.b. the price of the ticket plus the cost of any sodaand popcorn you buy at the theater.c. the total cash expenditure needed to go to themovie plus the value of your time.d. zero, as long as you enjoy the movie and considerit a worthwhile use of time and moneyarrow_forwardQ.No.2 To a child the opportunity cost of going to cricket match includes the value of time that could have been spent studying? Explainarrow_forwardEvery point on the production possibilities curve represents? a. a greater increase in supply b. an efficient use of rescources c. an inefficient use of resources d. a greater increase in demandarrow_forward
- Direction: Plot the Production Possibilities Frontier of the below-data with good X on the horizontal axis and good Y on the vertical axis. GOOD PRODUCTION ALTERNATIVES A B C D E X 0 15 18 21 24 Y 45 42 37 27 0 Question: Explain the different points on the curve. What does each point represent? Why is it important for an economy to be on its production possibilities frontier?arrow_forwardWhat is the opportunity cost of attending college ?What happens in terms of opportunity cost as one gets more educated? Eg. 2yr, 4yr degree, MS degree, PhD. What role does college choice play in your analysis (Ivy league vs state school, the value of a college name etc)arrow_forwardGraph 1: Draw a production possibilities model with 4 points labelled A, B, C, D, one inside, two on, and one outside the production possibilities curve. Explain the 4 points in terms of scarcity, choice and efficiency. Graph 2: Draw a production possibilities model which illustrates economic growth.arrow_forward
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