00 Mc Graw Hill Connect 5. Refer to the following production possibilities table for con sumer goods (automobiles) and capital goods (forklifts): LO1.6 a. Show these data graphically. Upon what specific assump- tions is this production possibilities curve based? b. If the economy is at point C, what is the cost of one more automobile? COf one more forklift? Which characteristic of the production possibities curve reflects the law of increas ing opportunity costs: its shape or its length? c. If the economy characterized by this production possibilities table and curve is producing 3 automobiles and 20 forklifts what could you conclude about its use of its available- resources? d. Is production at a point outside the production possibilities curve currently possible? Could a future advance in technol- ogy allow production beyond the current production possi- bilities curve? Could international trade allow a country to consume beyond its current production possibilities curve? Production Alternatives Type of Production Automobiles 4 Forklifts 30 27 21 12

00 Mc Graw Hill Connect 5. Refer to the following production possibilities table for con sumer goods (automobiles) and capital goods (forklifts): LO1.6 a. Show these data graphically. Upon what specific assump- tions is this production possibilities curve based? b. If the economy is at point C, what is the cost of one more automobile? COf one more forklift? Which characteristic of the production possibities curve reflects the law of increas ing opportunity costs: its shape or its length? c. If the economy characterized by this production possibilities table and curve is producing 3 automobiles and 20 forklifts what could you conclude about its use of its available- resources? d. Is production at a point outside the production possibilities curve currently possible? Could a future advance in technol- ogy allow production beyond the current production possi- bilities curve? Could international trade allow a country to consume beyond its current production possibilities curve? Production Alternatives Type of Production Automobiles 4 Forklifts 30 27 21 12

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question 16 ) Listen Refer to the production possibilities curves. Curve (a) is the current curve for the economy. Focusing on curve (a), point N suggests that the economy currently produces: (a) (b) Capital Goods O a) A combination of output that is less than its potential O b) Less goods for the future than at point P O c) Less goods for the present than at point P O d) More goods for the future than at point P Question 17 ) Listen Consider an economy that is producing inside its production possibilities curve. This economy could move closer towards its production possibilities curve by: a) Distributing incomes more equally b) Acquiring additional resources c) Employing more of its available resources d) Increasing the levels of wages and prices Consumer Goods
3. Suppose 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. LO1.5 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 oppor- tunity cost of one more candy bar? Of one more bag of
QUESTION 8 product Y 28 24 20 16 12 8 4 0 0 Production Possibilities Frontier point A -point F 4 8 12 product X point B -point C 16 20 -point E -point D 24 08. Which of the following statements about point C is TRUE? O a) to produce more of product Y, some of product X has to be sacrificed. b) the economy cannot reach this point without an increase in resources or improvement in technology. c) the economy is producing efficiently. d) both (a) and (c). e) none of the above.
Suppose that Lo and Manuel can either run errands or wash dishes. Their maximum outputs per hour are listed in the following table. Assume that opportunity costs are constant. Errands Run Dishes Washed Lo 60 Manuel 40 (a) Who has absolute advantage in running errands? [ Select ] (b) Who has comparative advantage in washing dishes? [Select] [ Select ] Lo Manuel > >
33
The table below pertains to Pieway, an economy in which the typical consumer's basket consists of 15 bushels of peaches and 10 bushels of pecans. Year Price of Peaches Price of Pecans 2012 $11 per bushel $6 per bushel 2013 $9 per bushel $10 per bushel Refer to Table 24-2. The cost of the basket in 2012 was O a. $212.50. O b. $235. ○ c. $200. O d. $225.
If John didn't go to the movie tonight with a friend, he would save the $5 parking fee and spend four hours at working overtime at $15 per hour. The opportunity cost of spending the evening at the movies with his friend is: O A. $0 OB. $5 C. $60 O D. $65
Please answer questions C and D. Thank you.
Assume that Robyn wants to buy socks and once she finds out that the price per pair is $5. she decides to buy 4 pairs of socks. Which of the following is true? O a) The marginal benefit (or marginal utility) of the 5th pair is higher than the marginal cost of the Sth pair O b) The marginal benefit (or marginal utility) of the 4th pair must be equal to $20 O O The marginal benefit (or marginal utility) of the Sth pair must be lower than $5 O d) The marginal benefit (or marginal utility) of the first pair must be lower than 55
Suppose Duncan budgets $20 a week for entertainment. He can either go bowling for $4 a game, or play mini golf for $6 a game. Duncan maximizes his total utility by bowling twice and playing two games of mini golf. If the marginal utility from his second game of mini golf equals 12, what is the marginal utility per dollar from his second game of bowling? O 2 4-