Foundations of Economics, Student Value Edition Plus MyLab Economics with eText -- Access Card Package (8th Edition)
8th Edition
ISBN: 9780134641843
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Question
Chapter 3, Problem 2SPPA
To determine
Attainable and efficient level of output at 50 units of entertainment and 50 units of good food.
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Table 1:
James
Lucy
Wagons
16
18
Tricycles
32
24
Table 1 shows the output per week of two people, James and Lucy. They can either devote their time to making wagons or making tricycles.
What is Lucy's opportunity cost of making a wagon?
-A) Describe production and the factors that go into producing various goods and services.
-B) Describe the opportunity cost an economy incurs to increase the production of one product.
Use a production possibilities frontier
Table 1
James
Lucy
Wagons
16
18
Tricycles
32
24
Table 1 shows the output per week of two people, James and Lucy. They can either devote their time to making wagons or making tricycles.
What is Lucy's opportunity cost of making a wagon?
1 1/3 tricycles
3/4 of a wagon
3 wagons
2 tricycles
Chapter 3 Solutions
Foundations of Economics, Student Value Edition Plus MyLab Economics with eText -- Access Card Package (8th Edition)
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- Explain why societies cannot make a choice above their production possibilities frontier and should not make a choice below it.arrow_forward3. Opportunity Cost Poornima and Valerie are roommates. They spend most of their time studying (of course), but they leave some time for their favorite activities: making pizza and brewing root beer. Poornima takes 5 hours to brew a gallon of root beer and 3 hours to make a pizza. Valerie takes 8 hours to brew a gallon of root beer and 4 hours to make a pizza. Poornima's opportunity cost of brewing a gallon of root beer is__________ , and Valerie's opportunity cost of brewing a gallon of root beer is_________ . ________ has an absolute advantage in brewing root beer and__________ has a comparative advantage in brewing root beer. If Poornima and Valerie trade foods with each other,________ will trade away pizza in exchange for root beer. The price of pizza can be expressed in terms of gallons of root beer. The highest price at which pizza can be traded that would make both roommates better off is___________ of root beer, and the lowest price…arrow_forward3. Opportunity Cost Rina and Yvette are roommates. They spend most of their time studying (of course), but they leave some time for their favorite activities: making pizza and brewing root beer. Rina takes 4 hours to brew a gallon of root beer and 2 hours to make a pizza. Yvette takes 6 hours to brew a gallon of root beer and 4 hours to make a pizza. Rina's opportunity cost of brewing a gallon of root beer is , and Yvette's opportunity cost of brewing a gallon of root beer is . has an absolute advantage in brewing root beer, and has a comparative advantage in brewing root beer. If Rina and Yvette trade foods with each other, will trade away pizza in exchange for root beer. The price of pizza can be expressed in terms of gallons of root beer. The highest price at which pizza can be traded that would make both roommates better off is of root beer, and the lowest price that makes both roommates better off is of root beer per pizza.arrow_forward
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