Below is the production possibility schedule for an economy. Max. Annual output Quantity of fish (pounds) Quantity of potatoes (pounds) options 1000 800 300 600 500 400 600 E 200 650 F 675 1. Is it possible to produce 500 lbs fish and 800 lbs potatoes? Why or why not? Explain. 2. What is the opportunity cost of increasing the annual output of potatoes from 600 to 800 lbs? 3. What is the opportunity cost of increasing the annual output of potatoes from 200 to 400 lbs? 4. Suppose the economy is producing 800 Ibs of potatoes & 300 lbs of fish. What is the opportunity cost of producing 350 lbs of more fish? 5. Is the combination 600 lbs potatoes & 400 lbs fish efficient? Why or why not? Explain your answer

Below is the production possibility schedule for an economy. Max. Annual output Quantity of fish (pounds) Quantity of potatoes (pounds) options 1000 800 300 600 500 400 600 E 200 650 F 675 1. Is it possible to produce 500 lbs fish and 800 lbs potatoes? Why or why not? Explain. 2. What is the opportunity cost of increasing the annual output of potatoes from 600 to 800 lbs? 3. What is the opportunity cost of increasing the annual output of potatoes from 200 to 400 lbs? 4. Suppose the economy is producing 800 Ibs of potatoes & 300 lbs of fish. What is the opportunity cost of producing 350 lbs of more fish? 5. Is the combination 600 lbs potatoes & 400 lbs fish efficient? Why or why not? Explain your answer

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Ice cream (millions of gallons per year) 5 A 4 В 3 2 3 4 Milk (millions of gallons per year) The figure above shows the production possibilities frontier for a country. The opportunity cost of a gallon of milk between combination point A and Bis A) 4 gallons of ice cream for a gallon of milk. B) 3 gallons of ice cream for a gallon of milk. C) 1 gallon of ice cream for a gallon of milk. D) 1/3 of a gallon of ice cream for a gallon of milk. E) zero because at point A, zero milk is being produced.
FIGURE 2-10 Wheat (bushels) Apples (bushels) 0 Refer to Figure 2-10. What movement along the production possibilities curve best illustrates the notion "To get more apples, we have to give up wheat"? 4 a movement from Point A to Point E a movement from Point E to Point C a movement from Point A to Point D a movement from Point B to Point E
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The following table and production possibilities frontier provide information about the production possibilities of Apple, a manufacturer of electronics. Use it to answer questions 15-19. Point HEUREK iPhone 600 500 400 iPhone iPod Touch 0 100 200 300 400 500 420 400 360 300 200 0 300 200 100 0 Apple's Production Possibilities 100 200 B 300 400 500 600 iPod Touch
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4. Shifts in production possibilities Suppose the United Kingdom produces two types of goods: agricultural and capital. The following diagram shows its current production possibilities frontier for barley, an agricultural good, and cars, a capital good. Drag the production possibilities frontier (PPF) on the graph to show the effects of an immigration law that results in fewer workers entering the country. 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. ? CARS (Thousands) 300 250 200 150 100 50 0 0 80 PPF 160 240 320 BARLEY (Millions of bushels) 400 480 6 PPF
1. Production Possibilities Country X is faced with the following output combinations for capital goods and consumer goods. Capital Goods Option ABCDE 8000 16000 24000 32000 Consumer Goods 220000 200000 160000 100000 Complete parts a, b, c, and d. a. Graph the production possibilities curve for Country X with capital goods on the x-axis and consumer goods on the y-axis. b. Does the Law of Increasing Opportunity Costs hold for this example? Explain why or why not. c. As you move from point B to point C, what is the cost of one more consumer good? d. If Country X wanted to experience higher levels of economic growth over the next few years, would they be better off choosing option B (a combination of 8000 capital goods and 200,000 consumer goods) or option D (a combination of 24000 capital goods and 100,000 consumer goods)? Explain.
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Refer to the production possibility frontiers for two friends Frodo and Sam who can both produce Ice creams and Jelly beans. Frodo's maximum production of Ice creams is 500 with no Jelly beans, or 2,000 Jelly beans with no Ice creams. Sam's maximum production of Ice creams is 600 with no Jelly beans, or 1,200 Jelly beans with no Ice creams. ICE CREAMS ICE CREAMS 600 500 1200 JELLY BEANS 2000 JELLY BEANS Frodo' PPF Sam's PPF Answer briefly these TWO questions in the box space provided below. Part A: Assuming efficient production without trade, derive the maximum amount of Jelly beans that can be produced by Sam along with 300 Ice creams. Describe your steps in detail. Part B: Assume that Frodo and Sam agree to specialize in production and trade between themselves. Frodo offers 1,000 Jelly beans to Sam in exchange for 300 lce creams. Would Sam agree to this trade?
A production possibility frontier corn. The farmer can grow 80 bushels of soybeans or 160 bushels of corn on each acre of land. The price of soybeans is $13.20 per bushel. The price of corn is $5.85 per bushel. A farmer can grow soybeans or What is the opportunity cost (in dollars) per acre to grow soybeans? Corn? Which crop (pick only one) do you think the farmer will produce? Why?
1. If the economy is operating at point C in the PPF below, the opportunity cost of producing an additional 15 units of bacon is: Exhib: 6 50 40 30- A 20 10 D 20 20 40 50 60 (a) 40 eggs (b) 10 eggs (c) 20 eggs (d) 30 eggs (e) 50 eggs Explain: _ ||| 38 Egys