Identify the role of scarcity on PPF .

Question

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Answer 1

Question

Chapter 2, Problem 1SPA

(a)

To determine

Identify the role of scarcity on PPF.

(a)

Expert Solution

Explanation of Solution

Figure 1 illustrates the PPF of Company B.

Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText - Access Card Package (12th Edition), Chapter 2, Problem 1SPA

In Figure 1, the x-axis shows food crops and the y-axis shows ethanol. The PPF shows the production combinations of ethanol and food crops. The production combinations of these commodities lie beyond the PPF and are not attainable with the given resources; this indicates the concept of scarcity. The movement along the PPF also indicates scarcity because when one good produces more, other goods are reduced.

Economics Concept Introduction

Scarcity: Scarcity refers to the limited availability of resources than the required level.

Production possibility frontier: Production possibility frontier shows the boundary between the combination of two goods and services that can produced at the given level of resources.

(b)

To determine

Identify the concept of production efficiency.

(b)

Expert Solution

Explanation of Solution

A production possibility frontier shows the combination of two commodities that can be produced at the given level of resources. Therefore, the combinations of commodities that lie along the PPF indicate efficient production levels. In this case, if Company B produces 40 barrels of ethanol per day, then the production of food per day needed to achieve the production efficiency will be 3 tons.

Economics Concept Introduction

Efficient production: Efficient production shows the combinations of two commodities that lie along the PPF.

(c)

To determine

Identify the concept of tradeoff in a PPF.

(c)

Expert Solution

Explanation of Solution

A movement along the PPF curve explains that producing more of one good leads to producing less of another good. Therefore, there is a tradeoff that exists between the commodities; it is also noted that this type of tradeoff exists only at an efficient production level. In this case, Company B has limited resources and technology. Therefore, an increase in the production of one good decreases the production of the other good. As a result, Company B will face a tradeoff on its PPF.

Economics Concept Introduction

Production possibility frontier: Production possibility frontier shows the boundary between the combination of two goods and services that can be produced at the given level of resources.

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Use the figure below to answer the following question. Let I represent Income when healthy, let I represent income when ill. Let E [I] represent expected income for a given probability (p) of falling ill. Utility у в ULI income Is есте IM The actuarially fair & partial contract is represented by Point X × OB A Y

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Answer 2

Question

Chapter 2, Problem 1SPA

(a)

To determine

Identify the role of scarcity on PPF.

(a)

Expert Solution

Explanation of Solution

Figure 1 illustrates the PPF of Company B.

Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText - Access Card Package (12th Edition), Chapter 2, Problem 1SPA

In Figure 1, the x-axis shows food crops and the y-axis shows ethanol. The PPF shows the production combinations of ethanol and food crops. The production combinations of these commodities lie beyond the PPF and are not attainable with the given resources; this indicates the concept of scarcity. The movement along the PPF also indicates scarcity because when one good produces more, other goods are reduced.

Economics Concept Introduction

Scarcity: Scarcity refers to the limited availability of resources than the required level.

Production possibility frontier: Production possibility frontier shows the boundary between the combination of two goods and services that can produced at the given level of resources.

(b)

To determine

Identify the concept of production efficiency.

(b)

Expert Solution

Explanation of Solution

A production possibility frontier shows the combination of two commodities that can be produced at the given level of resources. Therefore, the combinations of commodities that lie along the PPF indicate efficient production levels. In this case, if Company B produces 40 barrels of ethanol per day, then the production of food per day needed to achieve the production efficiency will be 3 tons.

Economics Concept Introduction

Efficient production: Efficient production shows the combinations of two commodities that lie along the PPF.

(c)

To determine

Identify the concept of tradeoff in a PPF.

(c)

Expert Solution

Explanation of Solution

A movement along the PPF curve explains that producing more of one good leads to producing less of another good. Therefore, there is a tradeoff that exists between the commodities; it is also noted that this type of tradeoff exists only at an efficient production level. In this case, Company B has limited resources and technology. Therefore, an increase in the production of one good decreases the production of the other good. As a result, Company B will face a tradeoff on its PPF.

Economics Concept Introduction

Production possibility frontier: Production possibility frontier shows the boundary between the combination of two goods and services that can be produced at the given level of resources.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 2, Problem 1SPA

(a)

To determine

Identify the role of scarcity on PPF.

(a)

Expert Solution

Explanation of Solution

Figure 1 illustrates the PPF of Company B.

Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText - Access Card Package (12th Edition), Chapter 2, Problem 1SPA

In Figure 1, the x-axis shows food crops and the y-axis shows ethanol. The PPF shows the production combinations of ethanol and food crops. The production combinations of these commodities lie beyond the PPF and are not attainable with the given resources; this indicates the concept of scarcity. The movement along the PPF also indicates scarcity because when one good produces more, other goods are reduced.

Economics Concept Introduction

Scarcity: Scarcity refers to the limited availability of resources than the required level.

Production possibility frontier: Production possibility frontier shows the boundary between the combination of two goods and services that can produced at the given level of resources.

(b)

To determine

Identify the concept of production efficiency.

(b)

Expert Solution

Explanation of Solution

A production possibility frontier shows the combination of two commodities that can be produced at the given level of resources. Therefore, the combinations of commodities that lie along the PPF indicate efficient production levels. In this case, if Company B produces 40 barrels of ethanol per day, then the production of food per day needed to achieve the production efficiency will be 3 tons.

Economics Concept Introduction

Efficient production: Efficient production shows the combinations of two commodities that lie along the PPF.

(c)

To determine

Identify the concept of tradeoff in a PPF.

(c)

Expert Solution

Explanation of Solution

A movement along the PPF curve explains that producing more of one good leads to producing less of another good. Therefore, there is a tradeoff that exists between the commodities; it is also noted that this type of tradeoff exists only at an efficient production level. In this case, Company B has limited resources and technology. Therefore, an increase in the production of one good decreases the production of the other good. As a result, Company B will face a tradeoff on its PPF.

Economics Concept Introduction

Production possibility frontier: Production possibility frontier shows the boundary between the combination of two goods and services that can be produced at the given level of resources.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 2, Problem 1SPA

(a)

To determine

Identify the role of scarcity on PPF.

(a)

Expert Solution

Explanation of Solution

Figure 1 illustrates the PPF of Company B.

Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText - Access Card Package (12th Edition), Chapter 2, Problem 1SPA

In Figure 1, the x-axis shows food crops and the y-axis shows ethanol. The PPF shows the production combinations of ethanol and food crops. The production combinations of these commodities lie beyond the PPF and are not attainable with the given resources; this indicates the concept of scarcity. The movement along the PPF also indicates scarcity because when one good produces more, other goods are reduced.

Economics Concept Introduction

Scarcity: Scarcity refers to the limited availability of resources than the required level.

Production possibility frontier: Production possibility frontier shows the boundary between the combination of two goods and services that can produced at the given level of resources.

(b)

To determine

Identify the concept of production efficiency.

(b)

Expert Solution

Explanation of Solution

A production possibility frontier shows the combination of two commodities that can be produced at the given level of resources. Therefore, the combinations of commodities that lie along the PPF indicate efficient production levels. In this case, if Company B produces 40 barrels of ethanol per day, then the production of food per day needed to achieve the production efficiency will be 3 tons.

Economics Concept Introduction

Efficient production: Efficient production shows the combinations of two commodities that lie along the PPF.

(c)

To determine

Identify the concept of tradeoff in a PPF.

(c)

Expert Solution

Explanation of Solution

A movement along the PPF curve explains that producing more of one good leads to producing less of another good. Therefore, there is a tradeoff that exists between the commodities; it is also noted that this type of tradeoff exists only at an efficient production level. In this case, Company B has limited resources and technology. Therefore, an increase in the production of one good decreases the production of the other good. As a result, Company B will face a tradeoff on its PPF.

Economics Concept Introduction

Production possibility frontier: Production possibility frontier shows the boundary between the combination of two goods and services that can be produced at the given level of resources.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 2, Problem 1SPA

(a)

To determine

Identify the role of scarcity on PPF.

(a)

Expert Solution

Explanation of Solution

Figure 1 illustrates the PPF of Company B.

Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText - Access Card Package (12th Edition), Chapter 2, Problem 1SPA

In Figure 1, the x-axis shows food crops and the y-axis shows ethanol. The PPF shows the production combinations of ethanol and food crops. The production combinations of these commodities lie beyond the PPF and are not attainable with the given resources; this indicates the concept of scarcity. The movement along the PPF also indicates scarcity because when one good produces more, other goods are reduced.

Economics Concept Introduction

Scarcity: Scarcity refers to the limited availability of resources than the required level.

Production possibility frontier: Production possibility frontier shows the boundary between the combination of two goods and services that can produced at the given level of resources.

(b)

To determine

Identify the concept of production efficiency.

(b)

Expert Solution

Explanation of Solution

A production possibility frontier shows the combination of two commodities that can be produced at the given level of resources. Therefore, the combinations of commodities that lie along the PPF indicate efficient production levels. In this case, if Company B produces 40 barrels of ethanol per day, then the production of food per day needed to achieve the production efficiency will be 3 tons.

Economics Concept Introduction

Efficient production: Efficient production shows the combinations of two commodities that lie along the PPF.

(c)

To determine

Identify the concept of tradeoff in a PPF.

(c)

Expert Solution

Explanation of Solution

A movement along the PPF curve explains that producing more of one good leads to producing less of another good. Therefore, there is a tradeoff that exists between the commodities; it is also noted that this type of tradeoff exists only at an efficient production level. In this case, Company B has limited resources and technology. Therefore, an increase in the production of one good decreases the production of the other good. As a result, Company B will face a tradeoff on its PPF.

Economics Concept Introduction

Production possibility frontier: Production possibility frontier shows the boundary between the combination of two goods and services that can be produced at the given level of resources.

Answer 6

Chapter 2, Problem 1SPA

(a)

To determine

Identify the role of scarcity on PPF.

(a)

Expert Solution

Explanation of Solution

Figure 1 illustrates the PPF of Company B.

Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText - Access Card Package (12th Edition), Chapter 2, Problem 1SPA

In Figure 1, the x-axis shows food crops and the y-axis shows ethanol. The PPF shows the production combinations of ethanol and food crops. The production combinations of these commodities lie beyond the PPF and are not attainable with the given resources; this indicates the concept of scarcity. The movement along the PPF also indicates scarcity because when one good produces more, other goods are reduced.

Economics Concept Introduction

Scarcity: Scarcity refers to the limited availability of resources than the required level.

Production possibility frontier: Production possibility frontier shows the boundary between the combination of two goods and services that can produced at the given level of resources.

Answer 7

Chapter 2, Problem 1SPA

(a)

To determine

Identify the role of scarcity on PPF.

Answer 8

(a)

Expert Solution

Explanation of Solution

Figure 1 illustrates the PPF of Company B.

Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText - Access Card Package (12th Edition), Chapter 2, Problem 1SPA

In Figure 1, the x-axis shows food crops and the y-axis shows ethanol. The PPF shows the production combinations of ethanol and food crops. The production combinations of these commodities lie beyond the PPF and are not attainable with the given resources; this indicates the concept of scarcity. The movement along the PPF also indicates scarcity because when one good produces more, other goods are reduced.

Answer 9

(a)

Expert Solution

Answer 10

(a)

Expert Solution

Answer 11

Expert Solution

Answer 12

Economics Concept Introduction

Scarcity: Scarcity refers to the limited availability of resources than the required level.

Production possibility frontier: Production possibility frontier shows the boundary between the combination of two goods and services that can produced at the given level of resources.

Answer 13

(b)

To determine

Identify the concept of production efficiency.

(b)

Expert Solution

Explanation of Solution

A production possibility frontier shows the combination of two commodities that can be produced at the given level of resources. Therefore, the combinations of commodities that lie along the PPF indicate efficient production levels. In this case, if Company B produces 40 barrels of ethanol per day, then the production of food per day needed to achieve the production efficiency will be 3 tons.

Economics Concept Introduction

Efficient production: Efficient production shows the combinations of two commodities that lie along the PPF.

Answer 14

(b)

To determine

Identify the concept of production efficiency.

Answer 15

(b)

Expert Solution

Explanation of Solution

A production possibility frontier shows the combination of two commodities that can be produced at the given level of resources. Therefore, the combinations of commodities that lie along the PPF indicate efficient production levels. In this case, if Company B produces 40 barrels of ethanol per day, then the production of food per day needed to achieve the production efficiency will be 3 tons.

Answer 16

(b)

Expert Solution

Answer 17

(b)

Expert Solution

Answer 18

Expert Solution

Answer 19

Economics Concept Introduction

Efficient production: Efficient production shows the combinations of two commodities that lie along the PPF.

Answer 20

(c)

To determine

Identify the concept of tradeoff in a PPF.

(c)

Expert Solution

Explanation of Solution

A movement along the PPF curve explains that producing more of one good leads to producing less of another good. Therefore, there is a tradeoff that exists between the commodities; it is also noted that this type of tradeoff exists only at an efficient production level. In this case, Company B has limited resources and technology. Therefore, an increase in the production of one good decreases the production of the other good. As a result, Company B will face a tradeoff on its PPF.

Economics Concept Introduction

Production possibility frontier: Production possibility frontier shows the boundary between the combination of two goods and services that can be produced at the given level of resources.

Answer 21

(c)

To determine

Identify the concept of tradeoff in a PPF.

Answer 22

(c)

Expert Solution

Explanation of Solution

A movement along the PPF curve explains that producing more of one good leads to producing less of another good. Therefore, there is a tradeoff that exists between the commodities; it is also noted that this type of tradeoff exists only at an efficient production level. In this case, Company B has limited resources and technology. Therefore, an increase in the production of one good decreases the production of the other good. As a result, Company B will face a tradeoff on its PPF.

Answer 23

(c)

Expert Solution

Answer 24

(c)

Expert Solution

Answer 25

Expert Solution

Answer 26

Economics Concept Introduction

Production possibility frontier: Production possibility frontier shows the boundary between the combination of two goods and services that can be produced at the given level of resources.