Macroeconomics
21st Edition
ISBN: 9781259915673
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 20.2, Problem 1QQ
To determine
Production possibility frontier and opportunity cost .
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Assume that two countries, A and B, can produce Beef and Barbecues and the production possibilities frontiers of two countries are represented by:
Country A: Beef = 30 - 1.25 BBQ and
Country B: BBQ = 15 - 0.5 Beef
Barbecues are measured in units, beef in kilograms.
a) On a single chart, graph the production possibility frontiers for Country A and for Country B. Make sure you use a good scale and mark all your axes and important curves or points.
b) Interpret the slope and the shape of the PPF for each country and make the relevant
comparisons.
c) Assume that each country allocates half of its resources to the production of beef and half of its resources to the production of barbecues. Under autarky (No trade), how much would each country consume of the two products? Plot these points on the graph as Ca and Cb respectively
d) Should either of these countries specialize in the production of beef and/or barbecues? If yes, explain which country and which products and why. If they…
State three reasons for the PPF to shift to the right or left.
Describe the circular flow of income and expenditures
Why do you think the PPF of the Philippines will possibly shift to the left?
Compare the points inside the PPF and outside the PPF
Give four examples of normative and positive statements
How can you apply the principle of opportunity cost in your study? Please give an example
Do you think the 24-hour store follow the marginal benefit principles? Why or why not
If the fixed input is the two hectare of land and the variable input is fertilizer explain how the principle of diminishing return work in the outputs.
Give an example of positive externality.
Explain one factor that determines demand
Differentiate between the consumer and producer surplus
What information does the demand function convey?
What is the information does the point of intersection between demand and supply curve convey?
Give at least three conditions for the demand to shift to the right or left.
Give an…
A country produces two goods: coconuts and umbrellas. Their production possibilities frontier (PPF) places coconuts on the x-axis and umbrellas on the y-axis.
How would a drought that makes it difficult to grow coconuts but does not affect the production of umbrellas change the PPF?
Neither the value of the x-intercept nor the y-intercept would change
The value of the y-intercept would increase but the value of the x-intercept would not change
The value of the x-intercept would increase but the value of the y-intercept would not change
Both the value of the x-intercept and the y-intercept would increase
The value of the y-intercept would decrease but the value of the x-intercept would not change
The value of the x-intercept would decrease but the value of the y-intercept would not change
Chapter 20 Solutions
Macroeconomics
Ch. 20.2 - Prob. 1QQCh. 20.2 - Prob. 2QQCh. 20.2 - Prob. 3QQCh. 20.2 - Prob. 4QQCh. 20 - Prob. 1DQCh. 20 - Prob. 2DQCh. 20 - Prob. 3DQCh. 20 - Prob. 4DQCh. 20 - Prob. 5DQCh. 20 - Prob. 6DQ
Ch. 20 - Prob. 7DQCh. 20 - Prob. 8DQCh. 20 - Prob. 9DQCh. 20 - Prob. 10DQCh. 20 - Prob. 11DQCh. 20 - Prob. 12DQCh. 20 - Prob. 13DQCh. 20 - Prob. 14DQCh. 20 - Prob. 1RQCh. 20 - Prob. 2RQCh. 20 - Prob. 3RQCh. 20 - Prob. 4RQCh. 20 - Prob. 5RQCh. 20 - Prob. 6RQCh. 20 - Prob. 7RQCh. 20 - Prob. 8RQCh. 20 - Prob. 9RQCh. 20 - Prob. 10RQCh. 20 - Prob. 11RQCh. 20 - Prob. 12RQCh. 20 - Prob. 13RQCh. 20 - Prob. 1PCh. 20 - Prob. 2PCh. 20 - Prob. 3PCh. 20 - Prob. 4P
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- Productivity Table Soup per unit of labor Swords per unit of labor Wesley 30 25 Fezzik 10 30 If each person specialized according to comparative advantage and later decides to move 4 units of labor to comparative disadvantage, what would be the result? Total soup production increases by 160, total sword production increases by 220 Total soup production decreases by 80, sword production increases by 220. Total soup production decreases by 20, total sword production increases by 160 Total soup production increases by 80, total sword production decreases by 220arrow_forwardExplain how this situation would affect a nation’s production possibilities curve: The quality of education in the nation’s colleges and universities improves greatly.arrow_forwardAssume that Nigeria's economy is represented by a PPF diagram with, agriculture on the X-axis and education on the Y-axis. From the article, mobile wireless internet is expected to...a) a) Move the Nigerian economy towards its production possibilities frontierb) b) Move Nigeria's PPF outwards c) c) Swivel the PPF towards the X-axisd) d) Swivel the PPF towards the Y-axisarrow_forward
- Labor productivity coefficients for the US and Brazil are given by the following table: Country Wheat per week Clothing per week Labor(number of workers) United States 2 8 100 Brazil 1 2 120 Solve for: Who has the absolute advantage in wheat? What is the opportunity cost of 1 unit of wheat in the US? in Brazil? What is the opportunity cost of 1 unit of clothing in the US? in Brazil? Who has the comparative advantage in Wheat? In Clothing? Draw the production possibility frontier for the US. (Put Wheat on the Y-axis and Clothing on the X-axis) For Brazil (Put Wheat on the Y-axis and Clothing on the X-axis) Suppose each country decides to split its labor force equally on the production of each good. Locate the point on the PPF curve for each country that represents this allocation of labor. What’s their production and consumption combination # at this point?arrow_forwardAmerican and Japanese workers can each produce 4 cars per year. An American worker can produce 10 tons of grain per year, whereas a Japanese worker can produce 5 tons of grain per year. To keep things simple, assume that each country has 100 million workers. For this situation, construct a table analogous to the table in Figure 1. Graph the production possibilities frontiers for the American and Japanese economies. For the United States, what is the opportunity cost of a car? Of grain? For Japan, what is the opportunity cost of a car? Of grain? Put this information in a table analogous to Table 1. Which country has an absolute advantage in producing cars? In producing grain? Which country has a comparative advantage in producing cars? In producing grain? Without trade, half of each country’s workers produce cars and half produce grain. What quantities of cars and grain does each country produce? Starting from a position without trade, give an example in which trade makes each country…arrow_forwardif a country's production possibilities boundary is drawn as a straight (downward -sloping) line then it indicates ?arrow_forward
- a. What is the opportunity cost of 1 ton of oranges for the nations of Argentina and Brazil, respectively?A. .25 ton of apples and .5 ton of applesB. 10 tons of apples and 4 tons of applesC. 2 tons of apples and 4 tons of apples D. 4 tons of apples and 2 tons of apples E. .5 ton of apples and .25 ton of apples b. What is the opportunity cost of 1 ton of apples for the nations of Argentina and Brazil, respectively?A. 4 tons of oranges and 2 tons of orangesB. 2.5 tons of oranges and .4 tons of orangesC. .25 tons of oranges and .5 tons of oranges D. 2 tons of oranges and 4 tons of oranges E. 5 tons of oranges and .25 tons of oranges c) Based on your answers in (a) and (b), which country will specialize in apples and which one in roanges? How did you figure this out?arrow_forwardDraw a production possibilities curve that shows the production of possibilities of the US and S Korea. See attached.arrow_forwardQuestion 7 A Production Possibilities Frontier shows Group of answer choices all the combinations of two goods or services a person/country wants to consume. all the combinations of how much of two goods a person/country can produce when they trade. the tradeoff between how much the person/country likes two goods or services. all the combinations of two goods a person/country is able to produce with the resources it has.arrow_forward
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