Refer to the figure. Which production possibility boundary is consistent with a diminishing Opportunity cost? And which one is consistent with a constant one? Capital Goods O A; C O C; A B; C C; B B с Consumer Goods
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- Specify and explain the typical shapes of marginal-benefifit and marginal-cost curves. How are these curves used to determine the optimal allocation of resources to a particular product? If current output is such that marginal cost exceeds marginal benefifit, should more or fewer resources be allocated to this product? Explain.Explain why societies cannot make a choice above their production possibilities frontier with own resources and should not make a choice below it.ple Choice ý the letter of the choice that best completes the statement or answers the question. 1. Which of the following is an example of lower production costs brought about by the use of technology? the delivery costs of gasoline to the consumer by diesel trucks the use of e-mail to replace slower surface mail а. b. the making of breads and pastries in local shops rather than large bakeries the importing of fresh vegetables from South America rather than using canned vegetables- с. d. 2. What is the effect of import restrictions on prices? They cause prices to drop. b. a. They cause prices to rise. They often cause prices to rise steeply and then drop. d. They usually do not have any lasting effect on price. с. 3. What do sellers do if they expect the price of goods they have for sale to increase dramatically in the future? sell the goods now and try to invest the money instead of resupplying sell the goods now but try to get the higher price for them store the goods until the…
- Which of the following indifference curve the slope of the production possibilities frontire? A, Opportunity cost B, Marginal cost C, Indifference Curve D, Marginal ProductAssume an economy that produces two goods experiences technological improvements in the production of one of its categories of goods. Using the ONE correct diagram aattached, discuss in terms of the production possibility frontier the economic impact of the technological improvement for this economy. Include in your answer the meaning of the production possibility frontier.a. Compute the opportunity cost in forgone consumer goods (millions of pounds of butter) for each additional unit of military output produced (number of planes) using the table below: Instructions: Enter your responses as a whole number. Military output Consumer goods output Opportunity cost 0 100 1 95 2 80 b. As military output increases, opportunity cos 3 60 4 35 (Click to select) decrease remain constant increase 5 0
- Which statement concerning a production possibilities curve is not true? a. it is usally linear b. a point outside it is currently impossible c. a trade-off exsists along such a curve d. a point inside the curve represents an ineffecient use of resourcesUsing your own words, describe the law of increasing opportunity costs. Be sure to explain why this phenomenon occurs and how it helps to contribute to the shape of the production possibilities frontier.The quantities shown are taken from a production possibilities frontier for an economy with diminishing returns. The blank in the table could be which value? Bags Courses 40 300 60 ? 80 100
- Production inefficiency occurs when production ____. is at any attainable point is at a point on the production possibilities frontier is at a point beyond the production possibilities frontier is at a point inside the production possibilities frontierIf we wanted to make the statement that a particular point on a production possibility frontier was both allocatively and technically efficient, which of the following additional pieces of information would we need? Selected answer will be automatically saved. For keyboard navigation, priess up/down arrow keys to select an answer, a b C d The relative prices of the goods. Consumer preferences between the goods. The costs of production of the goods. We don't need any additional information-if a point is technically efficient, it is also allocatively efficient.Refer to the production possibility frontiers for two friends Frodo and Sam who can both produce Ice creams and Jelly beans. Frodo's maximum production of Ice creams is 500 with no Jelly beans, or 2,000 Jelly beans with no Ice creams. Sam's maximum production of Ice creams is 600 with no Jelly beans, or 1,200 Jelly beans with no Ice creams. ICE CREAMS ICE CREAMS 600 500 1200 JELLY BEANS 2000 JELLY BEANS Frodo' PPF Sam's PPF Answer briefly these TWO questions in the box space provided below. Part A: Assuming efficient production without trade, derive the maximum amount of Jelly beans that can be produced by Sam along with 300 Ice creams. Describe your steps in detail. Part B: Assume that Frodo and Sam agree to specialize in production and trade between themselves. Frodo offers 1,000 Jelly beans to Sam in exchange for 300 lce creams. Would Sam agree to this trade?
