Econoline Company produces only two goods and they operate with limited resources. The production manager decides to conduct an analysis of its production possibilities to determine the best use of its limited resources. They create a Production Possibility Frontier (PPF) diagram to represent the maximum combinations of good X and good Y that can be produced with their available resources. As the output of Good Y increases along the frontier, which of the following changes involves the larges! opportunity cost? Good Y 20 15 10 5 a) b) c) d) 0 to 5 units 5 to 10 units 10 to 15 units 15 to 20 units Good X C

Econoline Company produces only two goods and they operate with limited resources. The production manager decides to conduct an analysis of its production possibilities to determine the best use of its limited resources. They create a Production Possibility Frontier (PPF) diagram to represent the maximum combinations of good X and good Y that can be produced with their available resources. As the output of Good Y increases along the frontier, which of the following changes involves the larges! opportunity cost? Good Y 20 15 10 5 a) b) c) d) 0 to 5 units 5 to 10 units 10 to 15 units 15 to 20 units Good X C

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter13: General Equilibrium And Welfare

Section: Chapter Questions

Problem 13.1P

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Econoline Company produces only two goods and they operate with limited resources. The production manager decides to conduct an analysis of its production possibilities to determine the best use of its limited resources. They create a Production Possibility Frontier (PPF) diagram to represent the maximum combinations of good X and good Y that can be produced with their available resources. As the output of Good Y increases along the frontier, which of the following changes involves the largest opportunity cost? Good Y 20 15 10 5 0 a) 0 to 5 units b) 5 to 10 units c) 10 to 15 units d) 15 to 20 units a Good X d
QUESTION 7 Olivia and Susan operate a store that sells burritos. There are two main activities: chopping up the ingredients and then cooking the fillings for the burritos. Olivia and Susan are deciding who should chop the ingredients and who should cook the fillings in order to maximise output. Olivia Susan Chopped Food (kg/hr) 15 20 Cooked Food (kg/hr) 20 30 Which of the following statements are true: For Olivia, the opportunity cost of 1kg of cooked food is 1.33kgs (to 2 decimal places) of choppectood. For Susan, the opportunity cost of 1kg of cooked food is 0.67kgs (to 2 decimal places) of chopped food. Susan should specialise in chopping. Olivia has an absolute advantage in chopping.
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Michael owns a strawberry farm in central California and is deciding how many strawberries to supply this month. Which question appropriately applies the cost-benefit principle to the supply decision? Is the price Michael gets for the extra bushel of strawberries at least as large as the marginal cost? What is the fixed cost of production for Michael's strawberries? If Michael was not producing strawberries, how else could he use his resources? Is Michael "holding all else constant" when making this decision?
Specify and explain the typical shapes of marginal-benefifit and marginal-cost curves. How are these curves used to determine the optimal allocation of resources to a particular product? If current output is such that marginal cost exceeds marginal benefifit, should more or fewer resources be allocated to this product? Explain.
Task 3 Pick one of your items. You have been contacted by a customer in Alaska who wants to purchase several of these items and wants you to ship the items to her. You have already established the cost per item and you will only charge the customer $5 to ship these items to Alaska. Suppose another company sells the same item but charges half of your price. However, if the customer buys from this company, she will be charged $20 in shipping costs. a. Write two equations to represent the customer's total cost based on how many items she buys from each of the two sellers-you and the other company. b. If the customer in Alaska wants to buy 5 items, from whom should she buy? Explain your answer. c. If the customer in Alaska wants to buy 50 items, from whom should she buy? Explain your answer. d. Solve the system of equations from part A. What method did you choose to solve the system? Why? e. Explain what your solution for part D means in terms of the situation.
Question 17 Refer to Daisy's PPF Given Daisy's PPF, the following production combo, 6 pies and 10 tarts is Group of answer choices an efficient use of resources. an inefficient use of resources. not possible with the given resources.
Food output QUESTION 20 Study the diagram and answer the question. Production possibility frontier A 25 B 15 H C 10 G D 5 E 0 5 10 15 20 25 30 Film output This production possibilities frontier is concave to the origin because: resources are equally substitutable between the production of food and films. society can have more food only if it produces more films. a) b) c) the cost of food in terms of films is constant. d) the opportunity cost of food in terms of films increases and more films are produced.
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Question: Suppose the United States can produce cattle or corn with a given amount of resources. Below is a graph depicting the production possibility frontier for the United States and the marginal benefit and cost of a bushel of corn. Discuss the relationship between the marginal cost and marginal benefit of corn and the production of both corn and cattle. (a) Discuss the overallocation of resources, underallocation of resources, and optimal allocation of resources. (b) When operating at the optimal level of corn production, what is the optimal level of cattle production? Why is this the optimal amount (why not more or less cattle)?
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Production Possibility Frontier (PPF) - This graph shows the maximum combination of two goods that an economy can produce, given its resources and technology. It is used to illustrate the concept of opportunity cost and to explain the trade-offs that must be made when choosing how to allocate resources. Show this graph with an example please.