Principles of Microeconomics (Second Edition)
2nd Edition
ISBN: 9780393623840
Author: Lee Coppock, Dirk Mateer
Publisher: W. W. Norton & Company
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Chapter 2, Problem 4QR
To determine
The reason for the outward bowing of
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Principles of Microeconomics (Second Edition)
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- What is a production possibilities frontier? How can we show efficiency on a productions possibilities frontier? How can we show inefficiency? What causes a production possibilities frontier to shift outward?arrow_forwardD). Draw a Production Possibilities Frontier for two goods: airplanes and soybeans. Choose the combination of output you prefer and, accordingly, the slope of your preference. Show three different points on the graph that represent an inefficient, an efficient, and a not feasible outcomes, respectively. E). Define positive and normative statements. Give examples.arrow_forwardExplain why societies cannot make a choice above their production possibilities frontier with own resources and should not make a choice below it.arrow_forward
- Why is a production possibilities frontier typically drawn as a curve, rather than a straight line?arrow_forwardHow could a society manage to end up consuming a bundle of goods that is beyond its production possibility frontier？ And, in doing so, how does it shift what it produces? Please include a graph that helps to illustrate your answer.arrow_forwardWhy is the production possibilities frontier measuring opportunity cost in terms of the other good or service?arrow_forward
- Debra can make either 12 cakes or 16 cookies in 4 hours. Sam can make either 6 cakes or 12 cookies in 4 hours. State Debra’s and Sam’s opportunity costs of producing one cake and one cookie. Draw and place your answer in a table which looks something like this:Cake CookieDebraSamarrow_forwardDebra can make either 12 cakes or 16 cookies in 4 hours. Sam can make either 6 cakes or 12 cookies in 4 hours. State Debra’s and Sam’s opportunity costs of producing one cake and one cookie. Draw and place your answer in a table which looks something like this: Cake CookieDebraSamarrow_forwardWith the aid of a diagram, draw a production possibility Frontier (PPF) for an economy producing meat and potatoes.Use the diagram to explain the concepts of choice, scarcity, inefficiency and opportunity cost.arrow_forward
- Consider a simple economy which produces two goods; pizzas and tractors. Using the production possibilities boundary and graphs for the pizza and tractor market show and explain how the precise allocatively and productively efficient point on the production possibilities boundary can be determined. Please draw a graph to show, not just write step by step.arrow_forwardAmy and Deborah are roommates. They spend most of their time studying (of course), but they leave some time for their favorite activities: making pizza and brewing root beer. Amy takes 5 hours to brew a gallon of root beer and 3 hours to make a pizza. Deborah takes 8 hours to brew a gallon of root beer and 4 hours to make a pizza. Amy's opportunity cost of brewing a gallon of root beer is ------ , and Deborah's opportunity cost of brewing a gallon of root beer is ------ . ------ has an absolute advantage in brewing root beer, and ------ has a comparative advantage in brewing root beer. If Amy and Deborah trade foods with each other, ------ will trade away pizza in exchange for root beer. The price of pizza can be expressed in terms of gallons of root beer. The highest price at which pizza can be traded that would make both roommates better off is ------ of root beer, and the lowest price that makes both roommates better off is ------ of root beer per pizza. Note:- Do not provide…arrow_forwardSuppose an economy produces clothing and food only. The following table shows the production possibilities of the economy: i. How does the production possibilities frontier indicate the potential of the economy? ii. What is the economy's total opportunity cost of producing 700 pounds of food? Show the steps of your calculation. iii Suppose the economy is currently producing at point C. What is the marginal opportunity cost of producing an additional pound of clothing? Show the steps of your calculation.arrow_forward
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