Microeconomics
2nd Edition
ISBN: 9781259813337
Author: KARLAN, Dean S., Morduch, Jonathan
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Question
Chapter 2, Problem 1RQ
To determine
To find:
The situation that is represented by the
Expert Solution & Answer
Explanation of Solution
A production possibility frontier (PPF) shows all possible combinations of two goods that can be produced with the given level of resources and available technology.
The following graph shows the PPF:
The production possibility curve shows the various combination of cookies and cupcakes that can be sold.
The graph shows three combinations A, B, and C. Each combination shows a particular quantity of cookies and cupcakes that can be sold.
However, any point or combination below the PPF curve will represent the loss and any point outside the PPF curve will represent out of reach combination.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
You’ve been put in charge of a bake sale for a localcharity, at which you are planning to sell cookiesand cupcakes. What would a production possibilities graph of this situation show?
Assume two moms live next to each other and both have one preschooler. They meet each other for the first time and discover that both of them work part-time twice a week. It turns out that both of them have their children attend a child care facility close to home. Furthermore, they each learn that when one mom is working the other is at home and vice versa. One of the moms has an idea and proposes to the other mom that each take care of the other's child while they work. That way they can save money on child care. If they do this, what will happen to the official GDP reported by the government and why? Is society necessarily worse off as a result of this arrangement?
For the three-part question that follows, provide your answer to each question in the given workspace. Identify each part with a coordinating response. Be sure to clearly label each part of your response as Part A, Part B, and Part C.Suppose you are saving your money to pay for a vacation for your family. So far, you have $400 saved. You plan on saving more each month so you can pay for the vacation at the end of the year. Assume that you save 10%more each month than the previous month.Part A: Write a formula that would show the amount you will have saved after 1 year.Part B: If the vacation costs a total of $8,000, will you be able to pay for it after 1 year?Part C: Explain why or why not. Show your work to support your answer.
Knowledge Booster
Similar questions
- Suppose Musashi buys a new tool that enables him to produce twice as many tea towels per hour as before, but it doesn't affect his ability to produce cutting boards. Use the green points (triangle symbol) to plot his new PPF on the previous graph. Because he can now make more tea towels per hour, Musashi's opportunity cost of producing cutting boards is _______ it was previously. higher than lower than the same asarrow_forwardSuppose that in the country of England, two goods can be produced on available agricultural land: wine and wool. Suppose that the opportunity costs of production are constant, so that the PPF is a straight line. Further, when all resources are devoted to wine production, England can produce 200 (thousand) barrels. When all resources are devoted to wool production, England can produce 400 (thousand) bushels of wool. What are the opportunity costs in England of producing a barrel of wine? Type your numeric answer and submitarrow_forwardSuppose that Ciana is deciding whether or not to buy a pair of sneakers that she has been researching online, and also the best place to make her purchase. Three different stores in the area sell the sneakers she likes, but some stores are more convenient for Ciana to reach than others. One option is her local shoe store located only 15 minutes away from where she works, where they charge a marked-up price of $124 for the sneakers: Store Travel Time Each Way Price of a Sneakers (Minutes) (Dollars per sneakers) Local Shoe Store 15 124 Different Neighborhood in Town 30 103 Rural Outlet 60 70 Ciana earns an hourly wage of $30 at her job. In order to purchase her sneakers she will have to take time off work, so each hour away from her job costs her $30 in lost income. Assume that Ciana’s travel time is the same each way (to and from the store) and that it will take her 30 minutes once she reaches a store to complete her shopping. Assume throughout the question…arrow_forward
- Question 30 Link and Zelda each have 12 hours a week they can spend making costumes and accessories for their cosplay group. Link has been doing this for years and can make a costume piece in 2 hours and an accessory item in 1 hour. Zelda is still learning and can make a costume piece in 3 hours and an accessory item in 2 hours. The opportunity cost of 1 costume piece for Link in terms of accessory items (i.e. accessory items per costume piece):arrow_forwardWhat does a production possibilities graph show in economics? how many items can be produced in a specific amount of time possible production costs one's final choice one's top two choices when making a decisionarrow_forwardViktor is a lawyer who loves filing legal briefs and motions. His goal is to get as many legal briefs and motions filed as possible. Viktor has a colleague, Mr. Bean, who can also write briefs and motions. The number of legal briefs and motions each can write in one day is shown in the table below. a. Fill in the rest of the table with the opportunity cost of legal briefs and motions written for each person. Be sure to include the units. b. If the two colleagues decide to specialize, who will write legal briefs and who will write legal motions? c. What is the range of legal briefs exchanged for one legal motion in order to make the terms of trade beneficial (better than not trading) for both colleagues? Maximum Legal Briefs Maximum Legal Motions Opportunity Cost of 1 Legal Brief Opportunity Cost of 1 Legal Motion Viktor 2 3 Mr. Bean 4 3arrow_forward
- Krisha can pick 4 pounds of coffee beans in an hour or gather 2 pounds of nuts. Tom can pick 2 pounds of coffee beans in an hour or gather 4 pounds of nuts. Each works 6 hours per day. Together, what is the maximum number of pounds of coffee beans the two can pick in a day? What is the maximum number of pounds of nuts the two can gather in a day? Maximum amount of coffee beans pounds per day Maximum amount of nuts pounds per day Now suppose Krisha and Tom were gathering the maximum number of pounds of nuts when they decided that they would like to begin picking 8 pounds of coffee beans per day. Who would pick the coffee beans? How many pounds of nuts would they still be able to gather? Would it be possible for Krisha and Tom in total to gather 26 pounds of nuts and pick 20 pounds of coffee beans each day? If so, how much of each good should each person pick? The combination of 30 pounds of coffee beans and 12 pounds of nuts per day is show Krisha and Tom's combined daily PPC.arrow_forwardQ15.) Answer each question. Marie has a weekly budget of $24, which she likes to spend on magazines and pies. The price of a pie is $12 1.) If the price of a magazine is $4 each, the maximum number of magazines she could buy in a week is ___. 2.) If she buys 1 pie the number of magazines she can buy in a week is ____. 3.) What is her S opportunity cost of purchasing a pie? ___ 4.) If Marie's weekly budget is $24, which she likes to spend on magazines and pies, and If the price of a pie is $12 each, what is the maximum number of pies she could buy in a week? ___arrow_forwardKiran and Amna live in IBA hostel. They own a small business in which they make brownies and pasta and sell them to people on campus. As shown in the table on the following page, Kiran can make 30 brownies per hour but only 6 bowls of pasta. Amna is a bit slower and can make only 24 brownies or 4 bowls of pasta in an hour Suppose that Kristen and Anna can sell all their brownies for PKR10 each and all their pasta bowls for PKR 50 each. If each of them worked 20 hours per week, how should they split their time between brownies and pasta? What is their maximum joint revenue?arrow_forward
- Given that Nathan has 10 acres and can grow 15 bales of hay or 40 bushels of corn on an acre, while Simon has 10 acres and can grow 20 bales of hay or 35 bushels of corn per acre. I am trying to come up with the equations to find out the maximum amount of produce they can jointly produce.arrow_forwardYou have decided to specialize in gathering firewood while Friday has specialized in fishing. Your time allocation sliders are set to allocate all of your time to gathering firewood. Now, use the additional sliders to state how many logs you will trade to Friday and how many fish you want in return. You must select a trade that make both you and Friday better off than you were before specialization and trading. In other words, you must both receive more than 2000 calories of fish and 32 logs of firewood. Both you and Friday’s consumption point is displayed on the PPF graphs as you adjust the trade.arrow_forward. Jenna and Walter are on a road trip across the country. They both say that they get 25 utils from peanut butter sandwiches and 25 utils from trail mix. Knowing this, we can conclude that Jenna a. gets the same satisfaction from peanut butter sandwiches that Walter does. b. gets more satisfaction from trail mix than Walter does. c. gets more satisfaction from trail mix than from peanut butter sandwiches. d. and Walter are both indifferent between other food than peanut butter sandwiches or trail mix. e. and Walter will consume the same amount of peanut butter sandwiches and trail mix on the road trip.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education