Problem 2 A Nation's residents can allocate their scarce resources either to producing consumption goods or to producing human capital (that is, providing themselves with training and education). The table below displays the production possibilities for this nation: See textbook, pages x-xx. Combination A B C D E F G H I J K Units of Consumption Goods 0 20 40 60 80 100 120 140 160 180 200 Units of Trained Individuals 100 90 80 70 60 50 40 30 20 10 0 Part a Plot this student's production possibilities curve (PPC). Use Excel to plot the curve. When done, copy th chart from Excel and insert it in the space provided below). Use Excel to plot the curve. When done, copy the chart from Excel and insert it in the space provided below. Part b Does the PPC illustrate the law of increasing additional cost? Please explain. Part c Suppose that the nation's residents currently produce combination D (60 units of consumption goods and 70 units of trained individuals). What is the opportunity cost of increasing production of consumption goods by 20 units by moving from combination D to combination E? Please explain.

Problem 2 A Nation's residents can allocate their scarce resources either to producing consumption goods or to producing human capital (that is, providing themselves with training and education). The table below displays the production possibilities for this nation: See textbook, pages x-xx. Combination A B C D E F G H I J K Units of Consumption Goods 0 20 40 60 80 100 120 140 160 180 200 Units of Trained Individuals 100 90 80 70 60 50 40 30 20 10 0 Part a Plot this student's production possibilities curve (PPC). Use Excel to plot the curve. When done, copy th chart from Excel and insert it in the space provided below). Use Excel to plot the curve. When done, copy the chart from Excel and insert it in the space provided below. Part b Does the PPC illustrate the law of increasing additional cost? Please explain. Part c Suppose that the nation's residents currently produce combination D (60 units of consumption goods and 70 units of trained individuals). What is the opportunity cost of increasing production of consumption goods by 20 units by moving from combination D to combination E? Please explain.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Opportunity Cost Analysis

Opportunity cost refers to the loss of potential benefits when choosing one alternative over another. It is the tradeoff a person makes, or the potential gains they miss out on, because of their choice. To analyze opportunity cost, we must consider the benefits and tradeoffs of each available option.

Question

Problem 2
A Nation's residents can allocate their scarce resources either to producing consumption goods or to
producing human capital (that is, providing themselves with training and education). The table below
displays the production possibilities for this nation: See textbook, pages x - xx.
Combination
A
B
с
D
E
F
G
H
I
J
K
Units of Consumption Goods
0
20
40
60
80
100
120
140
160
180
200
Units of Trained Individuals
100
90
80
70
60
50
40
Part b
Does the PPC illustrate the law of increasing additional cost? Please explain.
30
20
10
0
Part a
Plot this student's production possibilities curve (PPC). Use Excel to plot the curve. When done, copy the
chart from Excel and insert it in the space provided below). Use Excel to plot the curve. When done,
copy the chart from Excel and insert it in the space provided below.
Part c
Suppose that the nation's residents currently produce combination D (60 units of consumption goods
and 70 units of trained individuals). What is the opportunity cost of increasing production of
consumption goods by 20 units by moving from combination D to combination E? Please explain.

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Which point(s) are efficient? Briefly explain why. B Points A, B, C, and D because they are attainable. Points B, C, and D because this is where maximum output is produced with available resources. Point A because it is inside the production possibilities frontier. Point E because it is where the most capital and consumption goods combined are produced. A D Point B because it is where the most resources are used to produce capital goods. Which point(s) are inefficient? Briefly explain why. PPF O A. Points B, C, and D because they are on the production possibilities frontier. O B. Points B, C, D, and E because they are unattainable. Consumption goods O C. Points A, B, C, and D because they are attainable. O D. Point E because it is unattainable. OE. Point A because production there is not using all available resources. At which point is the country's future growth rate likely to be the highest? Briefly explain why. O A. Point E because it is where the production possibilities frontier…
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