MICROECONOMICS
11th Edition
ISBN: 9781266686764
Author: Colander
Publisher: MCG
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Question
Chapter 2, Problem 1IP
To determine
Check whether the given statement is true or false.
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The production possibilities frontier (PPF) is a simplified economic model that illustrates the different combinations of two products that an economy can produce given the resources it has available. Assume the country of Turkey can produce only apples or oranges and answer each of the following questions
A if a flood destroyed 20% of the farmland used to grow apples and oranges, which direction will Turkey's PPF shift /your answer should be "outwards" or "inwards") and why?
B. Turkey decides to begin increasing, the production of oranges. Explain the implications of this using the term "opportunity cost"
C An advancement in organic pesticide has allowed for less fruit to be damaged by pests. Explain how this change would alter the PPF.
What is an real-life example of a opportunity cost?
Can the Production Possibilities Curve shift left? If not, explain why. If it can, explain what
might cause this to happen.
Chapter 2 Solutions
MICROECONOMICS
Ch. 2.1 - Prob. 1QCh. 2.1 - Prob. 2QCh. 2.1 - Prob. 3QCh. 2.1 - Prob. 4QCh. 2.1 - Prob. 5QCh. 2.1 - Prob. 6QCh. 2.1 - Prob. 7QCh. 2.1 - Prob. 8QCh. 2.1 - Prob. 9QCh. 2.1 - Prob. 10Q
Ch. 2.A - Prob. 1QECh. 2.A - Prob. 2QECh. 2.A - Prob. 3QECh. 2.A - Prob. 4QECh. 2.A - Prob. 5QECh. 2.A - Prob. 6QECh. 2.A - Prob. 7QECh. 2.A - Prob. 8QECh. 2 - Prob. 1QECh. 2 - Prob. 2QECh. 2 - Prob. 3QECh. 2 - Prob. 4QECh. 2 - Prob. 5QECh. 2 - Prob. 6QECh. 2 - Prob. 7QECh. 2 - Prob. 8QECh. 2 - Prob. 9QECh. 2 - Prob. 10QECh. 2 - Prob. 11QECh. 2 - Prob. 12QECh. 2 - Prob. 1QAPCh. 2 - Prob. 2QAPCh. 2 - Prob. 3QAPCh. 2 - Prob. 4QAPCh. 2 - Prob. 5QAPCh. 2 - Prob. 1IPCh. 2 - Prob. 2IPCh. 2 - Prob. 3IPCh. 2 - Prob. 4IPCh. 2 - Prob. 5IPCh. 2 - Prob. 6IP
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- Let Utopia be a very small country that produces Cheese and Bread only. Its production possibilities frontier is provided in the table above. Suppose that a new technology affects Cheese production by making it possible to produce more cheese with a given amount of milk.How will this innovation in cheese industry affects the Production Possibilities Frontier. Explain your answer.arrow_forward“If resources were unlimited and were freely available, there would be no subject called “Economics”. What is the meaning of this statement?arrow_forwardLike a good economist, you calculated the cost of getting your college degree, including the opportunity cost. Suppose that at your university, you will pay $15,000 each year for tuition, $3,000 each year for textbooks, and $8,000 per year for room and board. Before you left for college, your boss at your high-school job offered you a job paying $15,000 per year.Assume that if you decided not to go to college, your parents would let you live at home for free.Including the opportunity cost, what is the cost of attending four years of college? $arrow_forward
- Can you confirm that I am correct with these positive and normative statements: Positive statement: When oil production slows in Texas, employment and tax revenues decline, and budget cuts at the state and local levels often follow. (Craymer has estimated that the state loses $85 million per year for every $1 decrease in oil prices.) Normative statement:If Russia agrees to production cuts and COVID-19 goes dormant in the hot summer months, as some experts expect, Texas’ coffers will have time to recover before lawmakers convene in 2021 to write a new budget. Or would this be a normative statement:Experts said Texas is better positioned to handle an oil price collapse today thanks to a diversified economy. The last collapse in oil prices, in 2014, also forced the industry to cut costs and otherwise become more efficient. But University of Texas at Austin energy resources professor Michael Webber said COVID-19 throws an unprecedented economic variable into the mix.arrow_forwardLike a good economist, you calculated the cost of getting your college degree, including the opportunity cost. Suppose that at your university, you will pay $10,000 each year for tuition, $2,500 each year for textbooks, and $8,000 per year for room and board. Before you left for college, your boss at your high- school job offered you a job paying $20,000 per year. Assume that if you decided not to go to college, your parents would let you live at home for free.arrow_forwardAccording to the CIA's World Factbook Website, in January of 2011 Swaziland surpassed Botswana as the country with the world's highest known HIV/AIDS prevalence rate. An economist would expect that an increased rate of death from HIV/AIDS would cause a country's production possibilities frontier to: shift left. get steeper. shift right. get flatter.arrow_forward
- Why is economics is deeply rooted in the concept of scarcity?arrow_forwardtrue or false Economic models must mirror reality or they are of no value. When economists make normative statements, they are more likely to be acting as scientists. If a country's worker can produce 5 hamburgers per hour and 10 bags of fries per hour, then absent trade with other countries,the price for 1 bag of fries is 2 hamburgers. If trade benefits one country, it's trading partner must be worse off due to the price of trade. If an advanced country has an absolute advantage in the production of everything(relative to certain less developed countries), the advanced country will benefit if it eliminates trade with less developed countries and becomes self sufficient.arrow_forwardMost economists believe the scarcity of resources will persist. Why?arrow_forward
- Assumptions are initial conditions made before production possibilities frontier(PPF) is built. Explain why assumptions are important in economics.arrow_forwardWhy did ancient Rome advocate natural economy and oppose commodity economy? Explain in detailarrow_forwardIntroduction to the Production Possibilities Curve (PPC) As you know, the basic economic problem is scarcity. Since we do not have enough scarce resources to satisfy everyone's needs and wants, we all have to make choices. We must choose how to spend our time, our energy, our money, and our material possessions, and for every choice that is made, a cost is suffered. The relationship between choice and cost can be shown in a graph called a production possibilities curve, or PPC. For example, consider a student who has 4 hours of free time in the evening. He or she can choose to spend some, all, or none of those 4 hours studying for a test the following day. He or she could also use the time to catch up on sleep. These choices can be graphed: Choice A - spend all 4 hours studying Choice B- spend 2 hours studying, and 2 hours getting extra sleep Choice C- spend all 4 hours sleeping Of course, other combinations of the 4 hours exist. The student could study for 3.5 hours, and get an extra…arrow_forward
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