roblem: Scarcity and Choice 25 B 15 10 5. 0. 80 160 240 320 400 480 560 640 STEEL (Thousands of tons) Suppose the economy initially produces 15 million pounds of food and 400,000 tons of steel, which is represented by point A. The opportunity cost of producing an additional 5 million pounds of food (that is, moving production to point B) is tons of steel. Suppose, instead, that the economy currently produces 336,000 tons of steel and 20 million pounds of food, which is represented by point B. Now the opportunity cost of producing an additional 5 million pounds of food (that is, moving to point C) is tons of steel. Comparing your answers in the two previous paragraphs, you can see that the opportunity cost of 5 million additional pounds of food at point B is the opportunity cost of 5 million additional pounds of food at point A. This reflects the CLOU O FOOD (Millions of pounds) 20

roblem: Scarcity and Choice 25 B 15 10 5. 0. 80 160 240 320 400 480 560 640 STEEL (Thousands of tons) Suppose the economy initially produces 15 million pounds of food and 400,000 tons of steel, which is represented by point A. The opportunity cost of producing an additional 5 million pounds of food (that is, moving production to point B) is tons of steel. Suppose, instead, that the economy currently produces 336,000 tons of steel and 20 million pounds of food, which is represented by point B. Now the opportunity cost of producing an additional 5 million pounds of food (that is, moving to point C) is tons of steel. Comparing your answers in the two previous paragraphs, you can see that the opportunity cost of 5 million additional pounds of food at point B is the opportunity cost of 5 million additional pounds of food at point A. This reflects the CLOU O FOOD (Millions of pounds) 20

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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8. A small bakery makes baguettes and muffins. With the resources available (workers, flour, machines) this bakery can produce either 1500 baguettes or 2000 muffins per day. a. What is the opportunity cost of an extra muffin in terms of baguettes? b. Assume that production is currently 1200 muffins and 600 baguettes. If the bakery wanted to expand its muffin production to 1300 muffins per day, how many baguettes would be baked?
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5. China is able to produce turnips and potatoes in combinations represented by the following table. (Each number represents 1,000s of bushes.) Potatoes Production Turnips point a. B C D E b. C. points. 100 and 0 90 and 10 and 20 and 30 and 40 70 40 0 Plot the data on a production possibilities graph, labeling Can China produce a combination of 30 turnips and 24 potatoes? Draw this production point on the graph (label it F) and verbally explain. Demonstrate that China experiences increasing opportunity costs by calculating the opportunity cost of producing another potato at each production point. Explain.
CAPITAL GOODS Use the diagram below to answer the questions that follow. M. CONSUMER GOODS (a) What change could cause the PPF to shift from the original curve (HJ) to the new curve (MN)? (b) Under what conditions might an economy be operating at point Z? (c) Why might a government implement a policy to mnove the economy from Point V to Point W? Question 3 F7 PrtSc Insert 88 F10 F11 6 F12 & 9- 7.
Figure 1 shows the PPF for an economy that produces Food and Clothes. Suppose the economy is currently producing 170 Food and 264 Clothes. What is the economy's opportunity cost of producing 150 additional Food? A) 90 Clothes B) 120 Clothes C) 170 Clothes D) 220 Clothes
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Hi! I am currently stuck on this question: Suppose there is an improvement in medical technology that enables more healthcare to be provided with the same amount of resources. How would this affect the production possibilities curve and, in particular, how would it affect the opportunity cost of education? I am confused as to why education increases. I know that the medical technology would increase the PPF because of the improvement, but wouldnt that decrease the opportunity cost of education because there is more technology? Thanks!
The graph to the right depicts an economy, Home, that produces both flowers and soybeans. Flowers are the labor intensive good and soybeans are the land intensive good. Home presently exports flowers. The graph also indicates Home's optimal point of production, X. Suppose that Home has acquired more land in which it can now produce 12 units of soybeans if all land were devoted toward its production. Using the three-point curved line drawing tool, draw the new production possibilities frontier that indicates this biased growth of land in Home. Properly label this curve. Carefully follow the instructions above and only draw the required object. The growth biased toward land causes OA. export-biased growth. O B. a decrease in the relative price of flowers. OC. a rightward shift of the relative supply curve. O D. import-biased growth. 16- 15- 14- 13- 12- 11- 10- 9- 7- 6- 5- Growth of a Factor Soybean output VV TT 7 8 9 10 11 12 13 14 15 16 Flower output €
Suppose that the US economy produces agricultural products (A) and manufactured products (M). Explain and graphically illustrate the impact of each of the following events on the economy’s production possibilities curve (draw a new PPF for each, placing M on the vertical axis). a. Scientists develop a new fertilizer that will increase the productivity of land on which agricultural products are grown. b. The price of manufactured goods increases. c. Russian attacks on Ukraine devastate the Ukrainian wheat crop, increasing their demand for American wheat. d. The government increases taxes on manufactured goods.
+1 >> CENGAGE MINDTAP Homework: Chapter 02 3. Shifts in production possibilities Suppose France produces two types of goods: agricultural goods and capital good. The following graph shows its current production possibilities frontier (PPF) for corn, an agricultural good, and airplanes, a capital good. On the following graph, adjust the production possibilities frontier (PPF) to show the effects of an improvement in soil quality because of new fertilization techniques. Hint: 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. AIRPLANES (Thousands) 360 300 240 180 120 60 0 0 10 20 30 PPF 40 50 60 CORN (Millions of bushels) PPF
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
This question is a file-upload question. Work your answer in a piece of paper, take a picture with your phone and upload the file. Using the table below answer the following: Points Soda Pizza A 10 В 1 6 3 a) Draw a PPF map (put soda in the vertical axis and pizza in the horizontal axis), showing all the points on the PPF. b) What is the opportunity cost of an extra pizza when you are on segment AB? What about when you are at segment CD? (i.e., how many sodas you have to give up in order to get an extra pizza? SHOW YOUR WORK!) c) What is your PPF's shape? Is it a straight line or does it have a bowed outward shape? Justify! d) Suppose that there is a new technology that affects ONLY the production of soda. Illustrate this effect on your PPF map.