Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 2, Problem 4SCQ
What are the similarities between a consumer’s budget constraint and society’s production possibilities frontier, not just graphically but analytically?
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Chapter 2 Solutions
Principles of Economics 2e
Ch. 2 - Suppose Alphonsos town raised the price of bus...Ch. 2 - Return to the example in Figure 2.4. Suppose there...Ch. 2 - Could a nation be producing in a way that is...Ch. 2 - What are the similarities between a consumers...Ch. 2 - Individuals may not act in the rational,...Ch. 2 - Would an op-ed piece in a newspaper urging the...Ch. 2 - Would a research study on the effects of soft...Ch. 2 - Explain why scarcity leads to tradeoffs.Ch. 2 - Explain why individuals make Choices that are...Ch. 2 - What is comparative advantage?
Ch. 2 - What does a production possibilities frontier...Ch. 2 - Why is a production possibilities frontier...Ch. 2 - Explain why societies cannot make a choice above...Ch. 2 - What are diminishing marginal returns?Ch. 2 - What is productive efficiency? Allocative...Ch. 2 - What is the difference between a positive and a...Ch. 2 - Is the economic model of decision-making intended...Ch. 2 - What are four responses to the claim that people...Ch. 2 - Suppose Alphonsos town raises the price of bus...Ch. 2 - During the Second World War, Germanys factories...Ch. 2 - It is clear that productive inefficiency is a...Ch. 2 - What assumptions about the economy must he true...Ch. 2 - Do economists have any particular expertise at...Ch. 2 - If the price of a magazine is 4 each, what is the...Ch. 2 - If the price of a pie is 12, what is the maximum...Ch. 2 - Draw Maries budget constraint with pies on the...Ch. 2 - What is Maries opportunity cost of purchasing a...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- discuss how starbucks coffee relates to scarcity and incentives and how they effect the following: what (what goods, and/or services are produced)arrow_forwardWhy would a hotel stay open during a slow month when it seems like the revenue from so few customers could not possibly cover all the costs of operating a large hotel? Use microeconomic terms to explainarrow_forwardExplain why societies cannot make a choice above their production possibilities frontier with own resources and should not make a choice below it.arrow_forward
- An economy will be operating on a point inside of its production possibilities frontier if there is inefficiency in resource allocations.what is meant by inefficiency ?you may find it helpful to use an example in your answer.arrow_forwardWhich of the following is NOT the way you can understand interaction effects? a. by graphing the cell means b. through inspecting cell means c. through inspecting marginal means d. by a verbal description of resultsarrow_forwardHow do constraints affect decision making?arrow_forward
- Once a scale of preference is drawn, it is important that choice is made among the several alternatives so that consumers will get a given level of satisfaction.” Use the above statement to explain the relationship between scarcity, choice, scale of preference and opportunity cost.arrow_forwardSuppose you won $15 on a lotto ticket at the local 7-Eleven and decided to spend all the winnings on candy bars and bags of peanuts. Candy bars cost $0.75 each while bags of peanuts cost $1.50 each. a. Construct a table showing the alternative combinations of the two products that are available. b. Plot the data in your table as a budget line in a graph. What is the slope of the budget line? What is the opportunity cost of one more candy bar? Of one more bag of peanuts? Do these opportunity costs rise, fall, or remain constant as additional units are purchased? c. Does the budget line tell you which of the available combinations of candy bars and bags of peanuts to buy? d. Suppose that you had won $30 on your ticket, not $15. Show the $30 budget line in your diagram. Has the number of available combinations increased or decreased?arrow_forwardWhy choice arise as a result of scarcity?arrow_forward
- 8. An individual's budget Suppose Carlos has a yearly budget of $160 to spend on milk and cereal. Milk is priced at $4 per gallon, and cereal is priced at $2 per box. If Carlos spends his entire $160 on milk, he can buy CEREAL (Boxes) Use the blue line (circle symbol) to plot Carlos's budget constraint on the following graph. Next, use the orange point (square symbol) to shade the area that represents combinations of milk and cereal that are affordable for Carlos. Finally, place the black point (plus symbol) on the point on Carlos's budget constraint that corresponds to a scenario in which Carlos spends $80 on each good. Note: Dashed drop lines will automatically extend to both axes. 120 110 100 90 80 70 60 50 40 30 20 10 0 0 10 20 30 gallons of milk. If he spends his entire $160 on cereal, he can buy 40 50 60 70 MILK (Gallons) 80 90 100 110 120 BC, ($160) Affordable Region $80 on Each boxes of cereal. BC₂ ($200)arrow_forwardUse a microeconomic model to explain how the market price and quantity would be affected by an increase in input prices.arrow_forwardWhat is opportunity cost? Explain the Law of Increasing Opportunity Costs with a numerical table and a graph as well.arrow_forward
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