The production possibilities frontiers depicted in the diagram to the right illustrateOA. both the labor force and capital stock decreasingB. technological advances in the tank industry.OC. both the labor force and capital stock increasing.OD. the likely result of a ground war.TanksProduction PossibilitiesAutomobiles

The production possibility curve shows the trade-off between the two commodities that arises from…

Answered: The production possibilities frontiers…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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…
1. James and Lisa can grow the following units of produce in a period of time: Tomatoes 180 150 James Lisa Peppers 45 50 a. Explain who has absolute advantage in producing each good. b. Calculate the opportunity cost for each producer and each good. c. Explain who has comparative advantage in producing each good.
15. If the U.S. were to stop trading with other nations, economists would predict that in the long run the U.S. would end up with: A. more jobs. B. lower prices. C. a higher standard of living. D. a lower standard of living. 16. The price of American goods have slowed and decreased in part to which of the following: A. Outsourcing. B. Increases in educational scoring. C. law of one price D. globalization and increased trade. 17. If Canadians wanted significantly more French products than usual, the: A. demand curve for the euro would shift right. B. demand curve for the euro would shift left. C. supply curve for the euro would shift right. D. supply curve for the euro would shift left. 18. EU product price levels have stayed the same over the last year while inflation in the US has increased. EU exports will : A. increase and EU. imports decrease, causing the demand for Euros to rise and the supply of Euros to fall. B. decrease and EU. imports increase, causing the demand for Euros to…
Consider an economy with just one technique available for the production of each good. Good Labor per unit output Land per unit output Food 1 2 Cloth a. Suppose land is unlimited but labor equals 100. Write and sketch the production possibility frontier. b. Suppose labor is unlimited but land equals 150. Write and sketch the production possibility frontier. c. Suppose labor equals 100 and land equals 150. Write and sketch the production possibility frontier. Hint: What are the intercepts of the production possibility frontier? When is land fully employed? Labor? Both d. Explain why the production possibility frontier of part (c) is concave. e. Sketch the relative price of food as a function of its out put in part (c). f. If consumers insist on trading 4 units of food for 5 units of cloth, what is the relative price of food? Why? g. Explain why production is exactly the same at a price ratio of pr/pc = 1.1 as at pr/pc = 1.9. h. Suppose that capital is also required for producing food…
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All of the following are advantages of free trade except: a. Free trade helps keep interest rates high b. The global market consists of more than 7 billion potential customers c. Global competition helps keep prices low. D.. Increase productivity in areas of comparative advantage
None
The formation of the world market began in: Select one: a.XVI b.after World War II c.twentieth century d.In antiquity
Refer to the production possibility frontiers for two friends Frodo and Sam who can both produce Ice creams and Jelly beans. Frodo's maximum production of Ice creams is 500 with no Jelly beans, or 2,000 Jelly beans with no Ice creams. Sam's maximum production of Ice creams is 600 with no Jelly beans, or 1,200 Jelly beans with no Ice creams. ICE CREAMS ICE CREAMS 600 500 1200 JELLY BEANS 2000 JELLY BEANS Frodo' PPF Sam's PPF Answer briefly these TWO questions in the box space provided below. Part A: Assuming efficient production without trade, derive the maximum amount of Jelly beans that can be produced by Sam along with 300 Ice creams. Describe your steps in detail. Part B: Assume that Frodo and Sam agree to specialize in production and trade between themselves. Frodo offers 1,000 Jelly beans to Sam in exchange for 300 lce creams. Would Sam agree to this trade?
Pratice problems
Comparative advantage explains why people _____. Select one: a. work at the job they love and grow their own food . b. don't grow their own food anymore, but instead they specialize and trade. c. work at the job they love the most. (only) d. grow their own food and make their own clothes instead of shopping for these things. e. specialize in one thing and consumer it all.
Answer the questions based on the figure below, which is for the country of Quantz.. Quantity of Coffee 280 240 200 160 120 80 40 0 Production Possibilities for Coffee and Tea 80 W 160 b. In moving from W to X 240 320 How much tea is gained and what is the cost in coffee? a. In moving from U to v tea is gained at the cost of tea is gained at the cost of c. In moving from Y to Z tea is gained at the cost of coffee. coffee. coffee.

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