And since we're giving up some of one good, does that mean the opportunity cost is a negative number? Josie Well, we don't often say that "it cost us negative two dollars" or "we gave up negative two units of something," right? We just say "it cost two dollars" or "we gave up two units." Sabrina Yeah, the "we gave up" or "it cost us" part kind of implies the negative, doesn't it? Josie Exactly! So we put opportunity cost in terms of absolute value - we get rid of the negative sign. Sabrina Okay, so what is the opportunity cost of one cake if we move from combination A to combination B? (If needed, round to two decimal places.) Continue PPF PPF Point A B с D E Y2 Y1 O 84 Number of Cookies. 37 35 29 20 0 X1 X2 Number of Cakes. 0 4 7 9 10 D X3 X4 E Cakes

And since we're giving up some of one good, does that mean the opportunity cost is a negative number? Josie Well, we don't often say that "it cost us negative two dollars" or "we gave up negative two units of something," right? We just say "it cost two dollars" or "we gave up two units." Sabrina Yeah, the "we gave up" or "it cost us" part kind of implies the negative, doesn't it? Josie Exactly! So we put opportunity cost in terms of absolute value - we get rid of the negative sign. Sabrina Okay, so what is the opportunity cost of one cake if we move from combination A to combination B? (If needed, round to two decimal places.) Continue PPF PPF Point A B с D E Y2 Y1 O 84 Number of Cookies. 37 35 29 20 0 X1 X2 Number of Cakes. 0 4 7 9 10 D X3 X4 E Cakes

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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• 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.
Which is a good example of an opportunity cost? 1. “To begin, I began selling prints of my pictures in 2019 throughout 2020. It's now closed. USPS and UPS were the options I had during this period to ship out orders. UPS was expensive at the moment for smaller or lightweight packages whereas USPS offered a cheap price for these types of packages. UPS ships more than 220 internationally while USPS ships to certain international destinations. I have chosen USPS over UPS, orders were delivered on time and without damage by the United States Postal Service. The opportunity cost is the cost of UPS shipping. “ 2. “To begin, I began selling prints of my pictures in 2019 throughout 2020. USPS and UPS were the options I had during this period to ship out orders. I chose to ship my orders via UPS rather than USPS since it had the choice to ship orders internationally. While USPS is cheap and has fast shipping. Shipping the orders with UPS did not ship orders out on time, orders were damaged, and…
• 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.
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 not
Would the opportunity cost be a benefit to UPS shipping or a benefit to UPS international shipping for this example? “To begin, I began selling prints of my pictures in 2019 throughout 2020. It's now closed. USPS and UPS were the options I had during this period to ship out orders. Smaller or lighter packages were more expensive to ship with UPS, but USPS provided a low-cost alternative. UPS ships more than 220 internationally, whereas; USPS is strict about shipping to specific international destinations. I have chosen USPS over UPS; by doing this, orders were delivered on time and without damage by the United States Postal Service.”
1)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?
Q.20 What will be the shape of PPC when marginal opportunity cost is increasing? (a) Concave to the origin (c) Upward sloping (b) Convex to the origin (d) both (a) and (c) (b)
Two neighboring island nations, Seychelles and Mauritius, produce iPad's, coffee, or a combination of both. Suppose that they each have 4 million labor hours available per week for production. The following table gives the amount of each product that can be produced using one hour of labor: Country Mauritius Seychelles Mauritius' opportunity cost of produing 1 iPad is iPads (per hour of labor) 12 of coffee. Therefore, 8 Initially, suppose Mauritius uses 1 million hours per week to produce iPads and 3 million hours per week to produce coffee, while Seycheles uses 3 million hours of labor per week to produce iPads and 1 million hours per week to produce coffee. Consequently, Mauritius produces 12 million iPads and 72 million pounds of coffee, and Seychelles produces 24 million iPads and 32 million pounds of coffee. Assume there are no other countries willing to trade with them. So, if Mauritius and Seychelles don't trade with each other, they can only consume what they can produce using…
Suppose that an economy produces only 2 goods, beer and pizza. Show a typical production possibilities frontier for this country and use it to define and explain the opportunity cost concept and the concept of increasing opportunity costs. If a technology was invented that made the production of beer much more efficient but had no effect on the production of pizza how would the production possibilities frontier change (show it). While all points on the production possibilities curves maximize production, which point maximizes satisfaction?With reference to a diagram, show and explain how a market, left on its own, will tend toward an equilibrium in which there is neither a surplus nor a shortage of the product.What condition must be met in order to conclude that an economy is maximizing social well-being? Do the equilibriums given by individual markets necessarily lead to the maximization of social well-being (that is, if demand is equal to supply, can you conclude that well-being is…
So, let's look at the last combination. What is the opportunity cost of one cake if we move from combination D to combination E? (If needed, round to one decimal place.)
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Use the PPF to answer the following questions: (a) At point F, how many sweaters are being produced? How many hard drives? (b) Label points A-H as either efficient, inefficient, or unattainable. (c) Can we determine if point F is productively efficient? If so, is it productively efficient? (d) Can we determine if point F is allocatively efficient? If so, is it allocatively efficient?