Economics, Student Value Edition (7th Edition)
7th Edition
ISBN: 9780134739229
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Question
Chapter 2, Problem 2.1.14PA
To determine
Relevance of opportunity cost.
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Students have asked these similar questions
The production possibility frontier is a graph that shows
Select one:
a.
how much goods a society can consume at various average price levels.
b.
all combinations of goods that a society can produce if it uses all its resources efficiently.
c.
all combinations of goods that a society can consume if it uses all its resources efficiently.
d.
all combinations of factors that a society can use if there are no idle factors.
e.
the rate at which a societyʹs output will grow if it uses all resources efficiently.
Let suppose in the world there is two country, Country X and Country Y. In country X there is only one worker A while on country Y the worker is B. And both can produce sugar and wheat. But the country B is specialized in producing wheat and the other one in sugar. Suppose that the A and the B each work 40 hours a week and can devote this time to growing sugar, raising wheat, or a combination of the both. The person A can produce a pound of sugar in 10 hours and a pound of wheat in 20 hours. The B, who is more productive in both activities, can produce a pound of Sugar in 8 hours and a pound of meat in 1 hour.
(a) Draw the Production Possibilities Frontiers for both workers?
(b) Whose have absolute and comparative advantage?
(c) Why they move toward trade?
(d) Graphically shows the gain from trade.
Q84
The law of one price says that the price of...
a.
Labour, measured in terms of its opportunity cost, is the same in all markets.
b.
A product that is costless to transport will be the same in all markets.
c.
A product is always equal to the absolute cost of the resources that went into its production in any country.
d.
Natural resources is the same in all markets.
e.
A product worldwide is always equal to the cost of production from the country with the lowest opportunity cost to make the product.
Chapter 2 Solutions
Economics, Student Value Edition (7th Edition)
Ch. 2 - Prob. 1TCCh. 2 - Prob. 2TCCh. 2 - Prob. 2.1.1RQCh. 2 - Prob. 2.1.2RQCh. 2 - Prob. 2.1.3RQCh. 2 - Prob. 2.1.4PACh. 2 - Prob. 2.1.5PACh. 2 - Prob. 2.1.6PACh. 2 - Prob. 2.1.7PACh. 2 - Prob. 2.1.8PA
Ch. 2 - Prob. 2.1.9PACh. 2 - Prob. 2.1.10PACh. 2 - Prob. 2.1.11PACh. 2 - Prob. 2.1.12PACh. 2 - Prob. 2.1.13PACh. 2 - Prob. 2.1.14PACh. 2 - Prob. 2.2.1RQCh. 2 - Prob. 2.2.2RQCh. 2 - Prob. 2.2.3PACh. 2 - Prob. 2.2.4PACh. 2 - Prob. 2.2.5PACh. 2 - Prob. 2.2.6PACh. 2 - Prob. 2.2.7PACh. 2 - Prob. 2.2.8PACh. 2 - Prob. 2.2.9PACh. 2 - Prob. 2.2.10PACh. 2 - Prob. 2.2.11PACh. 2 - Prob. 2.2.12PACh. 2 - Prob. 2.2.13PACh. 2 - Prob. 2.2.14PACh. 2 - Prob. 2.2.15PACh. 2 - Prob. 2.3.1RQCh. 2 - Prob. 2.3.2RQCh. 2 - Prob. 2.3.3RQCh. 2 - Prob. 2.3.4RQCh. 2 - Prob. 2.3.5RQCh. 2 - Prob. 2.3.6RQCh. 2 - Prob. 2.3.7PACh. 2 - Prob. 2.3.8PACh. 2 - Prob. 2.3.9PACh. 2 - Prob. 2.3.10PACh. 2 - Prob. 2.3.11PACh. 2 - Prob. 2.3.12PACh. 2 - Prob. 2.3.13PACh. 2 - Prob. 2.3.14PACh. 2 - Prob. 2.3.15PACh. 2 - Prob. 2.3.16PA
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- The concept of _________ __________ was introduced by economist David Ricardo, and it posits that, because each state differs in its ability to produce specific products, each state should produce and export that which it can produce most efficiently and import goods that other states can produce more efficiently.arrow_forwardExplain briefly why the people and firms operating within a command economy would in all cases be less free than the people and firms operating within a capitalist economy.arrow_forwardSuppose that in the UK 15 million cars could be produced with the same resources as 13 million airplanes. Suppose that in Poland 15 million cars could be produced with the same resources as 14 million airplanes. Which country has a lower opportunity cost in producing cars and why? In a one-factor economy, you have the following information: Home has 1,200 units of labor available. It can produce two goods, apples and bananas. The unit labor requirement in apple production is 3, while in banana production it is 2. Foreign, has a labor force of 800. Foreign’s unit labor requirement in apple production is 5, while in banana production it is 1. Graph Home’s & Foreign production possibility frontier. Specify the maximum quantity that can be produced from both goods. Find the absolute value of the slope. Compare the opportunity cost of apples in Home and in Foreign. If apples are sold at $9/unit and bananas are sold at $5/unit. Find the wages paid in Hometo produce apples and…arrow_forward
- Like a good economist, you calculated the cost of getting your college degree, including the opportunity cost. Suppose that at your university, you will pay $15,000 each year for tuition, $3,000 each year for textbooks, and $8,000 per year for room and board. Before you left for college, your boss at your high-school job offered you a job paying $15,000 per year.Assume that if you decided not to go to college, your parents would let you live at home for free.Including the opportunity cost, what is the cost of attending four years of college? $arrow_forwardLike a good economist, you calculated the opportunity cost of getting your college degree. Suppose that at your university, you will pay $15,000 each year for tuition, $3,000 each year for textbooks, and $8,000 per year for room and board. Before you left for college, your boss at your high-school job offered you a job paying $15,000 per year.Assume that if you decided not to go to college, your parents would not let you live at home.What is your opportunity cost for four years of college? $____arrow_forward
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