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

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Frontiers Of Microeconomics

Section: Chapter Questions

Problem 6PA

See similar textbooks

Similar questions

Complete the following logical statement: "Because of , individuals and societies must make choices, and they must therefore consider the opportunity cost of every action."Maria and Kevin need to decide which one of them will take time off from work to complete the rather urgent task of shearing their llamas. Maria is pretty good with a pair of shears; she can shear the llamas in 1 hour. Kevin is somewhat slow; it takes him 5 hours to shear the llamas. Maria earns $190 per hour as a psychiatrist, while Kevin earns $15 per hour as a cobbler. Keeping in mind that either Maria or Kevin must take time off from work to shear the llamas, who has the lower opportunity cost of completing the task? Maria Kevin Maria and Kevin face identical opportunity costs
. Diego and Darnell are roommates. They spend mostof their time studying (of course), but they leavesome time for their favorite activities: making pizzaand brewing root beer. Diego takes 4 hours to brewa gallon of root beer and 2 hours to make a pizza.Darnell takes 6 hours to brew a gallon of root beerand 4 hours to make a pizza.a. What is each roommate’s opportunity cost ofmaking a pizza? Who has the absolute advantagein making pizza? Who has the comparativeadvantage in making pizza?b. If Diego and Darnell trade foods with each other,who will trade away pizza in exchange for rootbeer?c. The price of pizza can be expressed in terms ofgallons of root beer. What is the highest price atwhich pizza can be traded that would make bothroommates better off? What is the lowest price?Explain.
The graph shows Wendell's PPE Wendell's opportunity cost of playing one hour of squash as he spends more time playing squash 養 O A. increases, because each additional hour he spends playing squash results in a greater decrease in his calculus grade O B. decreases, if he gets more benefit from playing squash than from studying calculus O C. is constant, if he gets as much benefit from playing squash as he does from studying calculus O D. increases, because a tradeoff exists between playing squash and studying calculus
Suppose you and a friend are stranded on an island and must gather firewood and catch fish to survive. Through experience, you know that if each of you spends an entire day on either activity, the result is given in the following table: You Your Friend Fish 7 8 Firewood 6 bundles 3 bundles You and your friend decide that you should each specialize so that one person catches fish while the other gathers firewood. But who should do which task? a. What is the opportunity cost for you to gather an additional bundle of firewood? fish. The opportunity cost for you to gather an additional bundle of firewood is (Round your answer to two decimal places.) What is your friend's opportunity cost of gathering an extra bundle of firewood? Your friend's opportunity cost of gathering an extra bundle of firewood is fish. (Round your answer to two decimal places.) b. Assuming that you and your friend specialize, what allocation of tasks maximizes total output for your one day of joint effort? To…
5. Opportunity cost and production possibilities Carlos is a skilled toy maker who is able to produce both trucks and drums. He has 8 hours a day to produce toys. The following table shows the daily output resulting from various possible combinations of his time. Hours Producing Produced Choice (Trucks) (Drums) (Trucks) (Drums) A 8 4 B 2 10 4 4 2 15 D 6. 1 17 8 18 On the following graph, use the blue points (circle symbol) to plot Carlos's initial production possibilities frontier (PPF). (? 30 25 Initial PPF 20 New PPF 15 10 1 2 3 5 7 8 TRUCKS DRUMS 2.
Consider the production possibilities frontier in the figure shown. The opportunity cost of cars when moving from point B to point C: Cigars 4004 300 200 100 O a Ob OC Od 10 B C 20 30 D 40 Cars is greater than the opportunity cost of cars when moving from point A to point B. None of these statements are true. is less than the opportunity cost of cars when moving from point A to point. 8. is greater than the opportunity cost of cars when moving between any other two points.
5. Opportunity cost and production possibilities Raphael is a skilled toy maker who is able to produce both cars and kites. He has 8 hours a day to produce toys. The following table shows the daily output resulting from various possible combinations of his time. Hours Producing Produced Choice (Cars) (Kites) (Cars) (Kites) A 8 4 6 3 11 4 2 17 2 6. 19 E 8 20 2. B.
Why does eveything we do have it's opportunity cost.
To determine how much of a good to produce to achieve allocative efficiency, we O A. construct a production possibilities frontier and choose the midpoint. O B. must produce on the PPF and at the point where the marginal benefit exceeds by as much as possible the marginal cost of the good. OC. construct a production possibilities frontier and choose any point on it. O D. must produce on the PPF and at the point where the marginal benefit exceeds by any amount the marginal cost of the good. O E. must produce on the PPF and at the point where the marginal benefit and marginal cost of the good are equal.
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 Lewis Puzzles Puppets 90 E 0 Puzzles 20 Puppets 75 TH 10 16 8 60 15 12 16 45 20 8 24 30 EHT 25 30 32 40 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? Puzzles: (Click to select) 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? Lewis: puzzles and [ puppets Geppetto: puzzles and puppets
What happens if a country produces a combination of goods that efficiently uses all of the resources available in the economy? 100- O A. The country has eliminated scarcity. O B. The country is maximizing its opportunity cost. A 80- c. The country is operating on its production possibilities frontier. B G O D. All of the above occur if a country uses all available resources. 60- Refer to the graph to the right. What is the opportunity cost of moving from point B to point C? 40- O A. 40 sedans 30 F **... O B. 40 SUVS D 20- O C. 20 sedans O D. 20 SUVS 10 50 E 20 40 60 80 100 Quantity of SUVS produced per day Quantity of sedans produced per day
Time left 0:58:4 2) John and Maria are both given free tickets to see a movie. Both decide to see the same movie. We know that: O a. both have an opportunity cost of seeing the movie because they could have done other things instead of seeing the movie. O b. both have the same opportunity cost of seeing the movie because they are doing the same thing. O c. it is not possible to calculate the opportunity cost of seeing the movie because the tickets were free. O d. it is possible to calculate the opportunity cost of seeing the movie and it is zero because the tickets were free. Next page