a) Draw a diagram to illustrate the economy's production possibilities curve.b) Use values from the table or the diagram to explain the concept ofopportunity cost.c) On your diagram, add a point "F" that is inside the curve. Describe how theeconomy is using its resources at point F.d] On your diagram, add a point "G" that is beyond the curve. Explain why thispoint is currently not attainable.e) Explain what would have to happen for the economy to reach point G.2. Using a (new) PPC diagram, explain what would happen if an economyexperienced a devastating natural disaster. Be sure to explain your reasoning

a) Diagram of the Economy's Production Possibilities Curve (PPC)The PPC is a graphical…

Answered: a) Draw a diagram to illustrate the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume the economy can produce either sports utility vehicles (SUVS) or minivans. The graph below depicts the current production possibilities frontier (PPF). Suppose several new factories are built. Move the end points of the PPF below to show how the PPF changes. Assume that the factory construction affects the economy's ability to produce both minivans and SUVs. Quantity of minivans Quantity of SUVs PPF This is an example of: economic stagnation. economic recession economic contraction. economic growth.
Any point on a country's production possibilities curve represents a combination of two goods that an economy will never be able to produce. can produce using all available resources and technology. can produce using some portion, but not all, of its resources and technology. may be able to produce in the future with more resources and/or technology.
c. Suppose a small country produces only food and clothing. An earthquake destroys many of the clothing factories, but the ability to produce food is unaffected. Use the 3-point-curve drawing tool to draw a new production possibilities boundary on the graph on the right, labeled c, reflecting the change in the clothing factories. Properly label this line. Place end points one on horizontal and one on vertical axes. Carefully follow the instructions above, and only draw the required objects. Tonnes of Clothing Per Year PPBO Tonnes of Food Per Year
Consider the production possibilities frontier below. Assume that an economy is producing the mix of outputs represented by point A. What would have to happen in order for this economy to produce at point B? Output 2 Technological progress A recession Output 1 Giving up some output 1 to produce more output 2 A decrease in taxes
The following graph shows the production possibilities curve for an economy that produces Consumption goods and Capital goods. Use the graph to answer the following questions A) How do you describe what is happening as the economy moves from point P to point L? (discuss it in terms of economic efficiency) B) Which combination - K or M - can lead to faster economic growth in the future? How do you know? Explain your answer. C) If the economy is currently operation at point L, what is the opportunity cost of producing 10 more Capital goods (Moving from combination L to combination M)?
4. Shifts in production possibilities Suppose the fictional country of Olympia produces two types of goods: agricultural and capital. The following diagram shows its current production possibilities frontier for rye, an agricultural good, and microprocessors, 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 microprocessors. 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. ? MICROPROCESSORS (Thousands) 400 400 320 240 160 80 100 270 PPF W م PPF
When economic growth occurs, the production possibilities frontier shifts outward but no longer limits the amount that can be produced. economy moves along its production possibilities frontier. production possibilities frontier shifts outward. production possibilities frontier becomes steeper.
The graph to the right depicts an economy, Home, that produces both flowers and soybeans. Flowers are the labor intensive good and soybeans are the land intensive good. Home presently exports flowers. The graph also indicates Home's optimal point of production, X. Suppose that Home has acquired more land in which it can now produce 12 units of soybeans if all land were devoted toward its production. Using the three-point curved line drawing tool, draw the new production possibilities frontier that indicates this biased growth of land in Home. Properly label this curve. Carefully follow the instructions above and only draw the required object. The growth biased toward land causes OA. export-biased growth. O B. a decrease in the relative price of flowers. OC. a rightward shift of the relative supply curve. O D. import-biased growth. 16- 15- 14- 13- 12- 11- 10- 9- 7- 6- 5- Growth of a Factor Soybean output VV TT 7 8 9 10 11 12 13 14 15 16 Flower output €
Suppose that the US economy produces agricultural products (A) and manufactured products (M). Explain and graphically illustrate the impact of each of the following events on the economy’s production possibilities curve (draw a new PPF for each, placing M on the vertical axis). a. Scientists develop a new fertilizer that will increase the productivity of land on which agricultural products are grown. b. The price of manufactured goods increases. c. Russian attacks on Ukraine devastate the Ukrainian wheat crop, increasing their demand for American wheat. d. The government increases taxes on manufactured goods.
Can the Production Possibilities Curve shift left? If not, explain why. If it can, explain what might cause this to happen.
If, next year, the production possibilities curve passes through point W on which point on this year’s production possibility curve (PPC) is it not possible for the economy to be operating? A) 100,144 B) 175,0 C) 80,144 D) 0,210
Help! The question is to Explain how the following situation would affect a nation's production possibilities curve. A category 5 hurricane destroys over 40% of the nation's productivity. The two questions are What happens to PPF and an explanation. The options for both are in the drop down.

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