Econ Micro (book Only)
Econ Micro (book Only)
6th Edition
ISBN: 9781337408066
Author: William A. McEachern
Publisher: Cengage Learning
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Chapter 2, Problem 5P
To determine

(a)

Plot the PPF graph with no curved lines

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

To determine

(b)

The cost of producing an additional car when 50 cars are being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

To determine

(c)

The cost of producing an additional car when 150 cars are being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

To determine

(d)

The cost of producing an additional washing machine when 50 cars are being produced and in case 150 are cars being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

To determine

(e)

What is derived about the concept of opportunity cost from the above answers.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

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Consider the table below, which has data on insurance status and medical expenditures for different types of professors at Hypothetical University (HU), economics & criminology professors. Assume that there are an equal number of economics and criminology professors. Assume further that econ professors all have the same level of health and criminology professors all have the same level of health. In 2020, every professor was offered a full insurance contract with no premium. In 2021, HU charged any employee who wanted to keep health insurance the actuarially fair premium based on 2020 expenditures. This premium would be equal to and, as a result,professors dropped their coverage in 2021. _ 2020 2021 Insured? Avg. Expenditures Insured? Avg. Expenditures Economics Professors Criminology Professors Yes Yes $25,000 $15,000 000000 $15,000; criminology $25,000; econ $20,000; econ $15,000; econ $20,000; criminology $25,000; criminology ??? $28,000 ??? $10,000
Consider the table below, which has data on insurance status and medical expenditures for different types of professors at Hypothetical University (HU), economics & criminology professors. Assume that there are an equal number of economics and criminology professors. Assume further that econ professors all have the same level of health and criminology professors all have the same level of health. There is evidence of 2021 Insured? Avg. Expenditures Insured? Avg. Expenditures 2020 Economics Professors Criminology Professors Yes. Yes $25,000 $15,000 0000 ??? ??? $28,000 $10,000 I. moral hazard because in 2021 criminology professors dropped their coverage and health expenditures went down. II. adverse selection because in response to rising premiums after 2020, the professors with lower health expenditure dropped coverage Both I and II neither I nor II
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