1. Upon what specific assumptions is the below production possibilities curve based? (It may help to try drawing the production possibilities curve first on scratch paper.) 2. If the economy is at point C, what is the cost of one more automobile? Of one more forklift? Which characteristic of the production possibilities curve reflects the law of increasing opportunity costs: its shape or its length? 3. If the economy characterized by this production possibilities table and curve were producing 3 automobiles and 20 forklifts, what could you conclude about its use of its available resources?

1. Upon what specific assumptions is the below production possibilities curve based? (It may help to try drawing the production possibilities curve first on scratch paper.) 2. If the economy is at point C, what is the cost of one more automobile? Of one more forklift? Which characteristic of the production possibilities curve reflects the law of increasing opportunity costs: its shape or its length? 3. If the economy characterized by this production possibilities table and curve were producing 3 automobiles and 20 forklifts, what could you conclude about its use of its available resources?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2. What effect does "Increasing Opportunity Cost" have on the Production Possibilities Curve? 3. What are the four categories of Resources? Give an example of each.
Both Geppetto and Lewis are toy store owners. They decide that they would like to trade puzzles and puppets in order to better stock their toy store shelves. The table below compares their production possibilities schedules. Production Possibilities Schedules Geppetto Puzzles 188 88 68 48 28 8 Puppets 8 4 8 12 16 20 Puzzles: (Click to select) Lewis: Puzzler 58 Geppetto: 48 30 20 18 8 Instructions: Enter your answers as a whole number. a. Geppetto and Lewis agree to trade at a rate of 3 puzzles for each puppet With those terms of trade, who is most likely to be the supplier of puzzles? Who is most likely to be the supplier of puppets? Lewds Puppets: (Click to select) b. The two toy store owners agree to specialize and to trade 30 puzzles for 10 puppets. The terms of trade are still 3 puzzles for each puppet How many puzzles and puppets will each one have after they complete their trade? puzzles and Puppets 8 S 18 15 20 25 puzzles and puppets puppets
Tools 4. Shifts in production possibilities Suppose the fictional country of Yosemite produces two types of goods: agricultural and capital. The following diagram shows its current production possibilities frontier for rice, an agricultural good, and axles, a capital good. Drag the production possibilities frontier (PPF) on the graph to show the effects of a time-saving innovation in the manufacturing of axles. Note: Select either end of the curve on the graph to make the endpoints appear. Then drag one or both endpoints to the desired position. Points will snap into position, so if you try to move a point and it snaps back to its original position, just drag it a little farther. AXLES (Thousands) 420 350 280 210 140 70 0 PPF 80 120 160 RICE (Millions of bushels) 200 240 PPF
A) What is the opportunity cost of moving from Point A to Point C? 4) What is the opportunity cost of moving from Point B to Point A? B) Is it possible to increase the quantity of cars produced and also increase the quantity of computers produced at the same time by moving from one point to another ON the production possibilities curve? Briefly explain your position. C) Is it possible to increase the quantity of cars produced and also increase the quantity of computers produced at the same time by moving from a point inside the production possibilities curve to a point ON the production possibilities curve? Briefly explain your position. D) What can cause a movement from Point C to Point D. Briefly explain your position. 8) What can cause a movement from Point C to Point B. Briefly explain your position.
Below is a production possibilities table for consumer goods (automobiles) and capital goods (forklifts): Show these data graphically. Upon what specific assumptions is this production possibilities curve based?
• Use the data from the table below to construct correctly labeled side-by-side graphs showing the production possibilities curve for Theo and Marlee. Assume that both have constant opportunity costs: Theo Marlee Bananas 20 50 Rice (in lbs.) 30 50 • Suppose that Theo and Marlee each spent half of their day making each good; Theo makes 10 bananas and 15 pounds of rice and Marlee makes 25 bananas and 25 pounds of rice. Show this point on the production possibilities curve of each person, and label that point X on your graph above. What is the total production of each good? • Suppose that Theo and Marlee agree to exchange 4 bananas for 5 pounds of rice. Under this agreement, Theo sells 15 pounds of his 30 pounds of rice to Marlee, in exchange for 12 of her 50 bananas. Show the new consumption points on the graph above for each person, and label these new consumption points Z.
Date: Shift in Production Possibilities Curve Consumption goods 7. The production possibilities frontier (beside) shows the available tradeoffs between consumption goods and capital goods. Suppose two countries facethis identical production possibilities frontier. Cápital goods Investment: This is indicated by a tradeoff between the production of consumergoods and capital goods. Investment results if society moves along the production possibilities curve, producing more capital goods and fewer consumption goods. Answer the following questions. a. Suppose Party Country chooses to produce at point A while Sleepy Country chooses to produce at Point B. Which country will experience more growth inthe future? Why? b. In this model, what is the opportunity of future growth? Page
Table Zoom A country has the following production possibilities table: Resources devoted Output of clothing Resources devoted Output of food to clothing to food 100% 20 0% 80 16 20 60 12 40 9. 40 8. 60 12 20 80 14 0. 0. 100 15 a. Graph the country's production possibilities curve. Be sure to label all parts of your graph. b. Say the country gets better at the production of food only. What will happen to the production possibilities curve? Demonstrate on your graph. c. Define increasing marginal opportunity costs. Now restate the definition in your own words. 2. X-Ray Machines .w
4. Shifts in production possibilities Suppose the United States produces two types of goods: agricultural and capital. The following diagram shows its current production possibilities frontier for wheat, an agricultural good, and cars, a capital good. Drag the production possibilities frontier (PPF) on the graph to show the effects of a time-saving innovation in the manufacturing of cars. Note: Select either end of the curve on the graph to make the endpoints appear. Then drag one or both endpoints to the desired position. Points will snap into position, so if you try to move a point and it snaps back to its original position, just drag it a little farther. 480 PPF 400 320 240 160 80 PPF 0. 90 180 270 360 450 540 WHEAT (Millions of bushels) CARS (Thousands)
Please answer 4.1 4.2 and 4.3
Question 06: Refer to the production possibilities frontier to the right for an economy that produces just two goods: trucks and boats. Label each point as: efficient (resources completely utilized), inefficient (some resources under-employed, or not-possible (not enough resources to produce the quantities of trucks and boats at present) Question 7 options: A) A, B, and C are all inefficient; D is efficient; E is not-possible B) A, B, and C are all efficient; D is inefficient; E is not-possible C) A, B, and C are all efficient; D is not-possible; E is inefficient D) A, B, and C are all not-possible; D is efficient; E is efficient
• Use the data from the table below to construct correctly labeled side-by-side graphs showing the production possibilities curve for Theo and Marlee. Assume that both have constant opportunity costs: Theo Marlee Bananas 20 50 Rice (in lbs.) 30 50 • Suppose that Theo and Marlee each spent half of their day making each good; Theo makes 10 bananas and 15 pounds of rice and Marlee makes 25 bananas and 25 pounds of rice. Show this point on the production possibilities curve of each person, and label that point X on your graph above. What is the total production of each good? • Suppose that Theo and Marlee agree to exchange 4 bananas for 5 pounds of rice. Under this agreement, Theo sells 15 pounds of his 30 pounds of rice to Marlee, in exchange for 12 of her 50 bananas. Show the new consumption points on the graph above for each person, and label these new consumption points Z.