Question 1 Part A The Marope Economy has the capacity to produce the goods and services that are outlined in Table 1 below. You are required to: a. Draw a Production Possibility Frontier (PPF) and list all efficient points of production. b. Marope Economy wishes to produce 520 billion units of consumer goods. Plot this output on the Frontier and state whether this is an efficient point or not. Table 1 - Production Possibilities Output (billions of A $ per year) Consumer goods Consumer services units 480 0 B 420 120 C 240 240 Part B Use graphs to demonstrate how the following factors will change the PPF. a. A decrease in migration b. An increase in natural resources c. Changes in technology D 0 300

Question 1 Part A The Marope Economy has the capacity to produce the goods and services that are outlined in Table 1 below. You are required to: a. Draw a Production Possibility Frontier (PPF) and list all efficient points of production. b. Marope Economy wishes to produce 520 billion units of consumer goods. Plot this output on the Frontier and state whether this is an efficient point or not. Table 1 - Production Possibilities Output (billions of A $ per year) Consumer goods Consumer services units 480 0 B 420 120 C 240 240 Part B Use graphs to demonstrate how the following factors will change the PPF. a. A decrease in migration b. An increase in natural resources c. Changes in technology D 0 300

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

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Chapter1: Making Economics Decisions

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Graph 1: Draw a production possibilities model with 4 points labeled A, B, C, D, one inside, two on, and one outside the production possibilities curve. Explain the 4 points in terms of scarcity, choice, and efficiency. Graph 2: Draw a production possibilities model which illustrates economic growth. Graph 3: Draw a production possibilities model and using your own numbers, explain the concept of the law of increasing opportunity cost. Graph 4: Draw a production possibilities model for North Korea and label the Y axis Guns, and the X axis Butter.  Put two points, A and B, on the curve.  Using the two points, explain the concept of government (or market) failure.
2. The graph below is set of hypothetical production possibilities for a nation. Consumption goods 7 6 5 4 3 2 1 A 0 1 B W 2 Capital goods C 3 4 5 6 7 3. From the information in the graph, which of the following points on the production possibilities curve are attainable with the resources and technology currently available?
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Problem 1: Production Possibilities Frontier Consider an economy that produces bicycles and autos. The production possibilities schedule shown below denotes the points on the production possibilities frontier. Points Amount Bicycles Amount Autos A 10 B 8 D E 5 8 12 14 15 a) Draw the production possibilities frontier in a clearly labelled graph. You can assume the points on the frontier are connected by straight lines. Please put bicycles on the x-axis and autos on the y-axis. b) Is point E more efficient in production than point C? Explain. c) Based on this production possibility frontier, can the economy currently produce 8 bicycles and 10 autos? If not, explain what would need to happen to allow the economy to produce 8 bicycles and 10 autos. d) True/False/Uncertain (and explain): Point B more efficient in allocation than point A. e) Does this production frontier have increasing opportunity costs? Explain, and also explain why it is common for production frontiers to have increasing…
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