EBK ESSENTIALS OF ECONOMICS
8th Edition
ISBN: 8220103599832
Author: Mankiw
Publisher: Cengage Learning US
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Chapter 2, Problem 2PA
Subpart (a):
To determine
Sub part (b):
To determine
Production possibility frontier.
Sub part (c):
To determine
Production possibility frontier.
Sub part (d):
To determine
Production possibility frontier.
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8:22 PM Fri Sep 13
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Imagine a society that produces military goods and consumer goods, which we'll call
"guns" and "butter."
a. Draw a production possibilities frontier for guns and butter. Using the concept of
opportunity cost, explain why it most likely has a bowed-out shape.
b. Show a point that is impossible for the economy to achieve. Show a point that is
feasible but inefficient.
c. Imagine that the society has two political parties, called the Hawks (who want a
strong military) and the Doves (who want a smaller military). Show a point on your
production possibilities frontier that the Hawks might choose and a point the Doves
might choose.
- 66%
a. Draw and explain a production possibilities frontier for an economy that produces cheese and milk. What happens to this frontier if a disease kills half of the economy’s cows? b. Use a production possibilities frontier to describe the idea of “efficiency.”
What is the production possibilities frontier?
A. a map that shows areas of the world in which capitalist production is highest
B. a map that shows the frontier beyond which technological innovation is unprofitable
C. a graph that shows the various combinations of resources that can be used to produce a given level of output
D. a graph that shows the various combinations of output the economy can possibly produce given the available resources and technology
Chapter 2 Solutions
EBK ESSENTIALS OF ECONOMICS
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- What does the Powerbar model tell us about how creativity fits into a market economy?arrow_forwardDraw and explain a production possibilities frontier for an economy that produces cheese and milk. What happens to this frontier if a disease kills half of the economy’s cows? Use a production possibilities frontier to describe the idea of “efficiency.” kindly solve both parts.arrow_forwardMany people think that soda consumption also leads to increased obesity. Many schools have banned the sale of soda in vending machines. Use the idea of opportunity costs to explain why some people think these bans will reduce consumption. Do you agree?arrow_forward
- Draw a production possibilities curve for food and clothing. If you are operating on the curve, what is the opportunity cost of producing more clothing? If you are on the curve, is it possible to increase production of one good without decreasing the production of the other?arrow_forwardDrawing a production possibilities frontier (PPF) Instructions: Consider an economy than only produces two goods - Blueberries and Batteries. Step 1: Draw a production possibilities frontier (PPF) for this economy. Label blueberries on the vertical axis and batteries on the horizontal axis. Label one point that is "efficient", one point that is "inefficient", and one point that is "unattainable". Step 2. Draw another PPF of the economy with the axes labeled. Grab another color pen/pencil/highlighter and show how the PPF would change if there was a technological change that increased the production of batteries only. (Hint: The intercept for blueberries will not change.) Clearly label the new PPF. Step 3. Draw another PPF of the economy with the axes labeled. Grab another color pen/pencil/highlighter and show how the PPF would change if there was a drought that destroyed some of the blueberry harvest. (Hint: The intercept for batteries will not change.) Clearly label the new…arrow_forward“Scarcity is the fundamental problem that every nation in this world faces.” What do you mean by this statement? If you were an economist how would you address this fundamental problem?arrow_forward
- D). Draw a Production Possibilities Frontier for two goods: airplanes and soybeans. Choose the combination of output you prefer and, accordingly, the slope of your preference. Show three different points on the graph that represent an inefficient, an efficient, and a not feasible outcomes, respectively. E). Define positive and normative statements. Give examples.arrow_forwardConsider an economy than only produces two goods - Blueberries and Batteries. Step 1: Draw a production possibilities frontier (PPF) for this economy. Label blueberries on the vertical axis and batteries on the horizontal axis. Label one point that is "efficient", one point that is "inefficient", and one point that is "unattainable". Step 2. Draw another PPF of the economy with the axes labeled. Grab another color pen/pencil/highlighter and show how the PPF would change if there was a technological change that increased the production of batteries only. (Hint: The intercept for blueberries will not change.) Clearly label the new PPF. Step 3. Draw another PPF of the economy with the axes labeled. Grab another color pen/pencil/highlighter and show how the PPF would change if there was a drought that destroyed some of the blueberry harvest. (Hint: The intercept for batteries will not change.) Clearly label the new PPF. Step 4: Draw another PPF of the economy with the axes labeled. Grab…arrow_forwardConsider a production possibility frontier with jeans on the vertical axis and shoes on the horizontal axis. As a country moves along the frontier closer to the vertical axis, A) inefficient production occurs. B) there are fewer tradeoffs. C) the opportunity cost of producing jeans increases. D) the opportunity cost of producing jeans decreases. the opportunity cost of producing shoes increases.arrow_forward
- Draw and explain a production possibilities frontier for an economy that produces milk and cookies. Use a production possibilities frontier to describe the idea of “efficiency.”arrow_forwardDraw and explain a production possibilities frontier for an economy that produces milk and cookies. What happens to this frontier if disease kills half of the economy's cows?arrow_forwardSuppose an economy produces clothing and food only. The following table shows the production possibilities of the economy: i. How does the production possibilities frontier indicate the potential of the economy? ii. What is the economy's total opportunity cost of producing 700 pounds of food? Show the steps of your calculation. iii Suppose the economy is currently producing at point C. What is the marginal opportunity cost of producing an additional pound of clothing? Show the steps of your calculation.arrow_forward
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