6. Efficiency in the production possibilities modelSuppose Italy produces only two goods: potatoes and cars. The following graph shows Italy's current production possibilities frontier, along with sixoutput combinations represented by black points (plus symbols) labeled A to F.ABсDECARS (In millions)F100860980PPF<+U0Complete the following table by indicating whether each point represents output combinations that are inefficient, efficient, feasible, or infeasible.Check all that apply.Point Inefficient Efficient FeasibleUUL0xcUE4060POTATOES (In millions)xo00000100Infeasible000?000C

A production possibility frontier is the locus of all combinations of two goods/services an economy…

O 6. Efficiency in the production possibilities model Suppose Italy produces only two goods: potatoes and cars. The following graph shows Italy's current production possibilities frontier, along with six output combinations represented by black points (plus symbols) labeled A to F. A B с D E 100 F 8 CARS (in millions) 8 8 8 PPF <+ 0 0 20 0 +6 Complete the following table by indicating whether each point represents output combinations that are inefficient, efficient, feasible, or infeasible. Check all that apply. Point Inefficient Efficient xc 000 € 60 POTATOES (In millions) 0 xo Feasible 0000 00 0 8 100 Infeasible 0000 ? 0

O 6. Efficiency in the production possibilities model Suppose Italy produces only two goods: potatoes and cars. The following graph shows Italy's current production possibilities frontier, along with six output combinations represented by black points (plus symbols) labeled A to F. A B с D E 100 F 8 CARS (in millions) 8 8 8 PPF <+ 0 0 20 0 +6 Complete the following table by indicating whether each point represents output combinations that are inefficient, efficient, feasible, or infeasible. Check all that apply. Point Inefficient Efficient xc 000 € 60 POTATOES (In millions) 0 xo Feasible 0000 00 0 8 100 Infeasible 0000 ? 0

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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From the previous analysis, you can determine that as Musashi increases his production of tea towels, his opportunity cost of producing one more tea towel decreases increases remains constant
Adjust the production possibilities frontier (PPF) to show the economy's new production possibilities after the deterioration of infrastructure. 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. QUANTITY OF CARS (Millions) 24 16 0 0 O 5 OO PPF 10 QUANTITY OF COMPUTERS (Millions) 15 Suppose society faces a broad tradeoff between allocating resources to the production of investment goods (computers) and consumption goods (cars) before the deterioration of infrastructure described above. PPF Which of the following events would be most likely to lead to the deterioration of infrastructure you just illustrated? Increasing production of investment goods and decreasing production of consumption goods Decreasing production of investment and consumption goods Increasing…
1 20 3. 4 9. 100 110 12 13 14 15 160 17C 18 19 20 31 21 22 23G 24 25 u. DOI (a) ana (C). O e. Both (b) and (c). O f. None of the above. QUESTION 4 Which of the following is true about exchange economies? O a. All core allocations are efficient. O b.In 2-person exchange economies, the core is equal to the set of efficient allocations that is also mutually beneficial relative to initial endowments. O c. In n-person exchange economies (with n>2), the core is smaller than the set of efficient allocations that is also mutually beneficial relative to initial endowments. O d. (a) and (b) are true. O e. (a) and (c) are true. O f. (b) and (c) are true. O g. All of the above are true. O h. None of the above are true. QUESTION 5 Which of the following is true about competitive equilibria in environments where the conditions of the first welfare theorem are satisfied? O a. We have to be able to represent the demand side of the economy by a representative consumer. O b.Consumer surplus is smaller…
Possibility Movie Tickets (M) Chocolate Truffles (C) (units) (units) A 60 0 B 40 35 с 20 45 D 0 50 Consider the above PPF. What is the opportunity cost of 1 unit of chocolate truffles as the island moves from possibility A to possibility B? O 4/7 units of movie tickets O 7/4 units of movie tickets O 20 units of movie tickets O 7/8 units of movie tickets
ed 13 out of an In one hour, Sue can produce 50 caps or 10 jackets and Tessa can produce 70 caps or 7 jackets. Sue's opportunity cost of producing a cap is, cost of producing a cap is. jackets. has a comparative advantage in producing caps. If Sue and Tessa each specialize in producing the good in which they have a comparative advantage and trade 1 jacket for 7 caps, then Select one: O a. 5.0/10.0/Tessa/Sue loses but Tessa gains O b. 0.2/0.10/Sue/both Sue and Tessa gain 0 c.0.2/0.10/Tessa / both Sue and Tessa gain 0 d. 0.2/0.10/Sue / Tessa gains but Sueloses e. 5.0/10.0/Sue/both Sue and Tessa gain jackets and Tessa's opportunity 47
Dreamliners per period 18 16 12 8 4 8 dreamliners A 0 4 8 B QUESTION 15 Production levels to the right of the PPF are: O attainable efficient O inefficient. Ounattainable 12 Production possibility frontier E : F H ● The graph shows the PPF for Aeroland. Given the graph above, what is the opportunity cost of increasing Dreamliner production from 8 dream liners (point E) to 16 Dreamliners (point B)? O12 small jets O18 small jets O 6 small jets 16 18 20 Small jets per period
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The production possibilities are listed below: Coconuts Pineapples 8. 2. 4 2 8. Which of the following best describes the PPF for the information above? Select one: O a. The opportunity cost of producing an additional pineapple decreases as the amount of coconuts produced decreases O b. The opportunity cost of producing an additional pineapple is the same at every point O c. The opportunity cost of producing an additional pineapple is zero at every point O d. The opportunity cost of producing an additional pineapple increases as the amount of coconuts produced increases 6. 4.
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In the production possibilities frontier depicted in the figure above, what is the opportunity cost of increasing the production of bananas from two million pounds to three million pounds? Use a production possibilities frontier to analyze opportunity costs and trade-offs. Hats (millions per year) 5 4 3 2 1 0 1 2 3 4 5 6 Bananas (millions of pounds per year) O 1/2 million hats 1 million hats O 2 million hats O 3 million hats
Suppose that United States is currently producing two goods: tanks and cars using its current resources. As the country is preparing for a war, it intends to produce more tanks and to do so, it starts coverting its car factories into tank factories. Which of the following is true? O The production possibilities curve will show the increasing opportunity costs as more tank is produced. The production possibilities curve for cars and tanks will shift outward. O The production possibilities curve will show decreased opprotunity costs as more tank is produced. O The production possibilities curve will shift inward.
2. Suppose that two countries can produce wheat or cotton. If country A produces only wheat it can produce 55 units of wheat, and if it produces only cotton it can produce 35 units of cotton. If country B produces only wheat it can produce 65 units of wheat, and if it produces only cotton it can produce 45 units of cotton. Given the production possibilities curves above, which of the following would be feasible terms of trade between country A and country B? a. one unit of wheat for 0.75 unit of cotton. b. one unit of cotton for 1.5 units of wheat. c. one unit of wheat for 0.55 unit of cotton. d. one unit of cotton for 1.67 units of wheat. e. all of the above are feasible terms of trade. f. none of the above are feasible terms of trade.