Exploring Macroeconomics
8th Edition
ISBN: 9781544363332
Author: Robert L. Sexton
Publisher: Sage Publications
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Question
Chapter 3, Problem 9P
To determine
(a)
The assumptions for a given production possibilities curve.
To determine
(b)
The calculation of
To determine
(c)
The combinations demonstrate constant or increasing opportunity costs.
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What is the opportunity cost of obtaining more of one good, as it relates to the production possibilities frontier?
the amount of the other good that must be given up
the market price of the additional amount produced
the amount of resources that must be devoted to its production
the number of dollars that must be spent to produce it
What can you say about all three of these Production Possibilities Frontiers?
a) All exhibit constant opportunity costs
b) All represent production where resources are not specialized
c) Each represents the trade-off between goods X and Y
d) All the above
e) None of the above
Question Completion Status:
A production possibilities table for two products, grain and airplanes, is found below. Usual assumptions regarding production possibilities are implied. Grain is measured in
metric tons and airplanes are measured in units of 1,000.
Grain
Airplanes
(metric tons)
(1,000s)
Combination
A
B
14
C
26
5
36
4
E
44
F
50
54
1
56
What is the opportunity cost of producing the first unit of airplanes? What is The marginal opportunity cost of producing the fourth unit of airplanes
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Similar questions
- Which of the following best describes what occurs along a bowed-out production possibilities curve? The opportunity cost of production of a good is zero. Resources can be transferred from one productive activity to another without requiring a sacrifice. The opportunity cost of production of a good falls as its output increases. The opportunity cost of production of a good rises as its output increases.arrow_forwardQuestion 2 How would each of the following situations affect a nation's production possibilities curve? The amount of time that unemployed workers can collect unemployment insurance is increased from 26 weeks to 96 weeks during a recession, resulting in workers remaining unemployed for a longer period of time. This a) does not shifts b) shifts the PPC.arrow_forwardGiven a production possibilities curve for investment goods and consumption goods, which of the following statements is true? Select one: a. A production point outside the current curve may be attained if the opportunity cost of producing an extra unit of the good measured on the horizontal axis remains constant. b. Acquiring a new technology would push the PPF inwards towards the origin. c. A production point outside the current curve can be efficiently produced with the current level of resources and technology, if the marginal cost of producing one more unit of consumption goods equals the marginal benefit. d. A production point below the PPF suggests that more of both goods can be produced with current resources and technology. e. Shifting resources to make more consumption goods is likely to enable attainment of a production point outside the current curve.arrow_forward
- Consider Figure 2-2 in Chapter 2. Assume the numbers on the y-axis 820 and 610 were changed to respectively 800 and 700. The opportunity cost of going from 240 to 480 units of food would now be _ and the law of increasing (opportunity) cost__ still hold. a) 100 // would b) 800 // would c) 700 // would not d) 100 // would notarrow_forward1)What does the law of increasing opportunity cost?2) Does the law of increasing opportunity cost apply for the Production Possibilities Frontier in the case of Rabbits and Berries?3) If the opportunity cost of Rabbits with respect to Berries (and/or vice versa) was constant, what would the PPF look like?arrow_forwardA nation's residents can allocate their scarce resources either to producing consumption goods or to producing human capital-that is, providing themselves with training and education. The table below displays the production possibilities for this nation. a) Suppose that the nation's residents currently produce combination A. What is the opportunity cost of increasing production of consumption goods by 10 units? By 60 units?b) Does the law of increasing additional cost hold true for this nation? Why or why not?arrow_forward
- if an economy experiences constant opportunity costs with respect to two goods, then the production possibilities curve between the two goods will be?arrow_forwardHparrow_forwardA production possibilities curve that is concave to the origin (bowed out) implies that as more of a good is produced, the opportunity cost (A) remains constant (B) decreases (C) decreases at first and then increases (D) increases (E) increases at first and then decreasesarrow_forward
- Food output QUESTION 20 Study the diagram and answer the question. Production possibility frontier A 25 B 15 H C 10 G D 5 E 0 5 10 15 20 25 30 Film output This production possibilities frontier is concave to the origin because: resources are equally substitutable between the production of food and films. society can have more food only if it produces more films. a) b) c) the cost of food in terms of films is constant. d) the opportunity cost of food in terms of films increases and more films are produced.arrow_forwardCHOOSE THE ANSWER FOR EACH QUESTION, FROM THIS LIST a)Reduction in resources b) Pivot outwards along the computer axis c)Unused Resources d)Increased production given resources e)Pivot outwards along the car axis f)PPF shift outwards g)Produce outside PPF h)Produce inside PPF i)PPF shifts inwards j)Increase in resourcesarrow_forwardCountry A can produce one Outfit in 6 hours and one unit of Corn in 2 hour. Country B can produce one Outfit in 17 hours and one unit of Corn in 6 hours. Which of the following statements is true? Group of answer choices A) If trade opens, Country B will tend to specialize in the production of Outfits while A will tend to specialize in the production of Corn – then gains from trade would typically be possible. B) Country B has a comparative advantage in Corn and will specialize in the production of Corn if trade opens. C) Country B has an absolute advantage in the production of both Corn and Outfits. D) None of the other options. E) If trade opens, Country A will tend to specialize in the production of Outfits while B will tend to specialize in the production of Corn – then gains from trade would typically be possible.arrow_forward
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