PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
7th Edition
ISBN: 9781260110920
Author: Frank
Publisher: MCG
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Question
Chapter 2, Problem 5P
(a)
To determine
Show the shift in
(b)
To determine
The attainable points in Figure 1.
(c)
To determine
The meaning of the given statement.
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You 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.
15. Which of the following statements is NOT true regarding the production function and the production possibilities curve?
a. Both the production function and the production possibilities curve maximise the amount of output attainable.
b. The production function describes the capacity of a single firm, whereas the production possibilities summarises the output capacity of the entire economy.
c. A production function tells us the maximum amount of output attainable from the use of all resources.
d. The production possibilities curve expresses the ability to produce various combinations of goods given the use of all resources.
Explain how each of the following situations would affect a nation’s production possibilities curve.
COVID -19 increases the number of unemployed workers in the nation.
A global pandemic results in 6 million confirmed cases and the death of over 400,000 individuals.
A switch to online delivery, increases access to education in the nation’s colleges and universities but might have a detrimental impact on the quality of education.
The nation passes a law requiring all employees to give the employees 16 weeks of paid vacation each year. Prior to this law employers were not legally required to give employees any paid vacation time.
What happens to the PPF ? explain.
Chapter 2 Solutions
PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
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- 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_forwardReferring to the table in question 10, suppose improvement occurs in the technology of producing forklifts but not in the technology of producing automobiles. Draw the new production possibilities curve. Now assume that a technological advance occurs in producing automobiles but not in producing forklifts. Draw the new production possibilities curve. Now draw a production possibilities curve that reflflects technological improvement in the production of both goods.arrow_forwardThe table below lists the maximum feasible quantities of digital apps and tablet devices that can be produced in 1 hour using all resources—land, labor, capital, and entrepreneurial talent that is available in the Southland and East Coast. In the Southland, residents can use all their resources to produce either 90 digital apps or 225 tablet devices per hour. In East Coast, residents can use all their resources to produce either 100 digital apps or 50 tablet devices per hour. Assuming constant opportunity costs of producing digital apps and tablet devices in both countries answer the following questions. Product Southland East Coast Digital apps 90 100 Tablet devices 225 50 What is the opportunity cost of producing tablet devices in Southland? What is the opportunity cost of producing digital apps in Southland? What is the opportunity cost of producing tablet devices in East Coast? What is the opportunity cost of producing digital apps in East…arrow_forward
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