PRINCIPLES OF MACROECONOMICS (OER)
2nd Edition
ISBN: 2810023110024
Author: OpenStax
Publisher: XANEDU
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Textbook Question
Chapter 2, Problem 11RQ
What does a production possibilities frontier illustrate?
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In the following table, complete the third column by determining the quantity sold in each country at a price of $18 per toy train. Next, complete the
fourth column by calculating the total profit and the profit from each country under a single price.
Price
Single Price
Quantity Sold
Price Discrimination
Country
(Dollars per toy
train)
(Millions of toy
trains)
Profit
(Millions of
dollars)
Price
(Dollars per toy
train)
Quantity Sold
(Millions of toy
trains)
Profit
(Millions of
dollars)
France
18
Russia
18
Total
N/A
N/A
N/A
N/A
Suppose that as a profit-maximizing firm, Le Jouet decides to price discriminate by charging a different price in each market, while its marginal cost of
production remains $8 per toy.
Complete the last three columns in the previous table by determining the profit-maximizing price, the quantity sold at that price, the profit in each
country, and total profit if Le Jouet price discriminates.
Le Jouet charges a lower price in the market with a relatively
elastic…
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Chapter 2 Solutions
PRINCIPLES OF MACROECONOMICS (OER)
Ch. 2 - Suppose Alphonsos town raised the price of bus...Ch. 2 - Return to the example in Figure 2.4. Suppose there...Ch. 2 - Could a nation be producing in a way that is...Ch. 2 - What are the similarities between a consumers...Ch. 2 - Individuals may not act in the rational,...Ch. 2 - Would an op-ed piece in a newspaper urging the...Ch. 2 - Would a research study on the effects of soft...Ch. 2 - Explain why scarcity leads to tradeoffs.Ch. 2 - Explain why individuals make Choices that are...Ch. 2 - What is comparative advantage?
Ch. 2 - What does a production possibilities frontier...Ch. 2 - Why is a production possibilities frontier...Ch. 2 - Explain why societies cannot make a choice above...Ch. 2 - What are diminishing marginal returns?Ch. 2 - What is productive efficiency? Allocative...Ch. 2 - What is the difference between a positive and a...Ch. 2 - Is the economic model of decision-making intended...Ch. 2 - What are four responses to the claim that people...Ch. 2 - Suppose Alphonsos town raises the price of bus...Ch. 2 - During the Second World War, Germanys factories...Ch. 2 - It is clear that productive inefficiency is a...Ch. 2 - What assumptions about the economy must he true...Ch. 2 - Do economists have any particular expertise at...Ch. 2 - If the price of a magazine is 4 each, what is the...Ch. 2 - If the price of a pie is 12, what is the maximum...Ch. 2 - Draw Maries budget constraint with pies on the...Ch. 2 - What is Maries opportunity cost of purchasing a...
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