Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
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Question
Chapter 2, Problem 1QE
To determine
The shift of the
Expert Solution & Answer
Explanation of Solution
The figure shows the production possibility curve.
In the figure, the horizontal axis represents the production of widgets and the vertical axis represents production of wadgets. As a result of an increase in the production of widgets, the point that touches the X-axis will move rightward. If the production of wadgets decreases, the point that touches the Y-axis moves downward. This will create a new production possibility curve.
Economics Concept Introduction
Production possibility curve: Production possibility curve refers to the different combinations of two commodities that can be produced using the available resources and technologies fully and efficiently.
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How could a country shift its production possibilities curve to the right through improved technology?
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Suppose the fictional country of Katmai produces two types of goods: agricultural and capital. The following diagram shows its current production
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MICROPROCESSORS (Thousands)
180
150
120
90
60
30
30
o
70
770
140
PPF
210
280
350
420
MILLET (Millions of bushels)
PPF
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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- Suppose the United States produces only two goods: alfalfa and computers. The following graph shows the United States’s current production possibilities frontier, along with six output combinations represented by black points (plus symbols) labeled A to F. Complete the following table by indicating whether each point represents output combinations that are inefficient, efficient, attainable, or unattainable. Check all that apply. (refer to screenshot for table and graph)arrow_forwardFood 0 Alpha Shelter Beta In the figure are two linear production possibilities curves for countries Alpha and Beta. We can conclude thatarrow_forwardThe figure above shows a country's production possibility frontier (PPFA). В PPFA PPFB The country's PPF shifts from PPFA to PPFB, and moves from Point 'A' to Point 'B'. Which event could explain this move? O The country acquired new technology in its major industries. O The country is recovering from a recession. The country decreases its capital-to-labor ratio. O The country utilizes its excess labor. Match each letter to the input it represents. Choose ] Human capital Labor Natural capital L Animals Natural resources and labor Labor and land Land and natural resources H Physical Capital Entrepreneurship/ Automation K Choose ] A Choose ] Use the lecture video and slides to fill in the blanks.The catch-up effect is why poor countries grow faster than rich ones. This is because developing countries to make their inputs more productive; whereas developed countries must to increase growth.arrow_forward
- mya and donovan produce two goods in an 8 hour day.Mya can produce 10 capital or 55 consumables and Donovan can produce 75 capital or 60 consumables. What is the opportunity cost for capital?arrow_forwardWhy is a production possibilities frontier typically drawn as a curve, rather than a straight line?arrow_forwardThe table below shows the production possibilities for Canada and Japan. Suppose that, prior to specialization and trade, both Canada and Japan are producing combination C. Product DVD players Bushels of wheat Product DVD players Bushels of wheat DVD players 100 80 60 40 20 0 20 A Canada 40 60 A 20 0 A 40 0 Quantity of wheat per period 80 B 15 20 a) Draw the production possibilities curve for Canada in the graph A, and indicate its present output position. Draw the production possibilities curve for Japan in graph B, and indicate its present output position. Plot only the endpoints of each curve in the graphing areas using the appropriate tool. Plot the output combination in each graph using the Point tool. 100 B 30 7.5 CANADA'S PRODUCTION POSSIBILITIES C 10 40 JAPAN'S PRODUCTION POSSIBILITIES с 20 15 Tools PP Curve combination D 5 Trading Possi New combina 60 D 10 22.5 E 0 80 E 0 30arrow_forward
- Why is the Production Possibility Curve (PPC) or Production Possibility Frontier (PPF) concave? What does increasing opportunity costs mean? When we increase production, why does it seem that we have to sacrifice more and more resources?arrow_forwardPlease help me explain how the economic concept of scarcity links production possibilities curves and comparative advantage. Explain how scarcity is the common foundation for PPCs and comparative advarrow_forwardDuring the second world war, Germany's factories were decimated. It also suffered many human casulaities, both soldiers and civilians. How did the war affect Germany's production possibility curve?arrow_forward
- What are the properties of the production possibility curvearrow_forwardWhy is the production possibility curve also called as the opportunity cost curvearrow_forwardSuppose the fictional country of Olympia produces only two goods: rice and electric scooters. The following graph plots Olympia's current production possibilities frontier, and includes six different output combinations given by black points (plus symbols) labeled A to F. ELECTRIC SCOOTERS (Millions) 20 40 100 80 60 PPF 201 40 E + 60 B × 4 F 80 100 RICE (Millions of bushels) ?arrow_forward
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