Suppose that the economy of El Paso creates only cowboyboots and pecans. The production possibilities frontier (PPF)per year for El Paso is illustrated in the graph and is currentlyproducing at the point labeled A.Move point B to show the economy efficiently producing onethousand more cowboy boots.Now, determine the opportunity cost of producing anadditional 1,000 cowboy boots, i.c., shifting from point A topoint B. Enter your answer specified to one decimal place.opportunity cost:Shift point C to indicate El Paso increasing production ofcowboy boots from point B by another thousand.pecansDetermine the opportunity cost of shifting from point B topoint C. Enter your answer specified to one decimal place.opportunity cost:This PPF exhibits what kind of opportunity costs?pecans5,0004,000Quantity ofcowboy boggs produced0,0002.0001,000050004000020005000 6000 701,000 2.000 3,000 4,000 5.000 6,000 7,000Quantity of pecans produced

Opportunity cost is the value of the next best alternative that is forgone when a choice is made. In…

Suppose that the economy of El Paso creates only cowboy boots and pecans. The production possibilities frontier (PPF) per year for El Paso is illustrated in the graph and is currently producing at the point labeled A. Move point B to show the economy efficiently producing one thousand more cowboy boots. Now, determine the opportunity cost of producing an additional 1,000 cowboy boots, i.e., shifting from point A to point B. Enter your answer specified to one decimal place. opportunity cost: pecans Shift point C to indicate El Paso increasing production of cowboy boots from point B by another thousand. Determine the opportunity cost of shifting from point B to point C. Enter your answer specified to one decimal place. 5,000 4,000 1,000 2.000 Kauno 1,000 5000 4000 0 2000 5000 6000 70 1,000 2.000 3,000 4,000 5,000 6,000 7,000 Quantity of pecans produced

Suppose that the economy of El Paso creates only cowboy boots and pecans. The production possibilities frontier (PPF) per year for El Paso is illustrated in the graph and is currently producing at the point labeled A. Move point B to show the economy efficiently producing one thousand more cowboy boots. Now, determine the opportunity cost of producing an additional 1,000 cowboy boots, i.e., shifting from point A to point B. Enter your answer specified to one decimal place. opportunity cost: pecans Shift point C to indicate El Paso increasing production of cowboy boots from point B by another thousand. Determine the opportunity cost of shifting from point B to point C. Enter your answer specified to one decimal place. 5,000 4,000 1,000 2.000 Kauno 1,000 5000 4000 0 2000 5000 6000 70 1,000 2.000 3,000 4,000 5,000 6,000 7,000 Quantity of pecans produced

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Suppose that the economy of El Paso creates only cowboy
boots and pecans. The production possibilities frontier (PPF)
per year for El Paso is illustrated in the graph and is currently
producing at the point labeled A.
Move point B to show the economy efficiently producing one
thousand more cowboy boots.
Now, determine the opportunity cost of producing an
additional 1,000 cowboy boots, i.c., shifting from point A to
point B. Enter your answer specified to one decimal place.
opportunity cost:
Shift point C to indicate El Paso increasing production of
cowboy boots from point B by another thousand.
pecans
Determine the opportunity cost of shifting from point B to
point C. Enter your answer specified to one decimal place.
opportunity cost:
This PPF exhibits what kind of opportunity costs?
pecans
5,000
4,000
Quantity ofcowboy boggs produced
0,000
2.000
1,000
0
5000
4000
0
2000
5000 6000 70
1,000 2.000 3,000 4,000 5.000 6,000 7,000
Quantity of pecans produced

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Using a production possibilities frontier (PPF) diagram, determine how does the PPF change in response to the events describe below. a) A relaxation of policies allowing more foreign direct investment into the country. b) Increasing the minimum wage level. c) A decrease in expenditure on research and development. d) An increase in the retirement age. e) Government policies supporting the provision of services, without affecting manufacturing.
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Assume that quantities do not need to be integers. That is, it is feasible for Andreas to knit 37.25 pairs of mittens. It takes Andreas 3 hours to knit a pair of mittens and 6 hours to knit a scarf. Assuming efficient production, what is the opportunity cost, in terms of pairs of mittens, of Andreas choosing to knit one extra scarf? Enter a number (and only a number, no units) rounded to two decimal places. If your answer is 1.275, enter 1.28.
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