When firms use new and better ways of producing all goods and services, OA. the opportunity cost of producing every good increases OB. the economy moves along its production possibilities frontier OC. economic growth occurs, but it is not free OD. the PPF rotates outward so that the economy can produce more of the good measured on the x-axis but the same amount of the good measured on the y-axis
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- Save A production possibilities frontier (PPF) is ou O A. a curve that shows the potential productive capabilities of the frontier (defined as the area outside of cities) of a developing economy. O B. a curve showing the maximum attainable combinations of two products that may be produced with available resources and current technology. O C. a curve showing the generally attainable combinations of two products that may be produced with all planned or potential, yet undeveloped technology. O D. a curve that illustrates the demand of two goods for the average consumer.Imagine a society that produces military goods andconsumer goods, which we’ll call “guns” and “butter.”a. Draw a production possibilities frontier for gunsand butter. Using the concept of opportunity cost,explain why it most likely has a bowed-out shape.b. Show a point on the graph that is impossible forthe economy to achieve. Show a point on thegraph that is feasible but inefficient.c. Imagine that the society has two political parties,called the Hawks (who want a strong military)and the Doves (who want a smaller military).Show a point on your production possibilitiesfrontier that the Hawks might choose and a pointthat the Doves might choose.d. Imagine that an aggressive neighboring countryreduces the size of its military. As a result, boththe Hawks and the Doves reduce their desiredproduction of guns by the same amount. Whichparty would get the bigger “peace dividend,”measured by the increase in butter production?Explain.Suppose that there are 10 million workers inCanada and that each of these workers can produce either 2 cars or 30 bushels of wheat in a year. a. What is the opportunity cost of producing acar in Canada? What is the opportunity costof producing a bushel of wheat in Canada?Explain the relationship between the opportunity costs of the two goods. b. Draw Canada’s production possibilities frontier. If Canada chooses to consume 10 millioncars, how much wheat can it consume without trade? Label this point on the productionpossibilities frontier. c. Now suppose that the United States offers tobuy 10 million cars from Canada in exchangefor 20 bushels of wheat per car. If Canadacontinues to consume 10 million cars, howmuch wheat does this deal allow Canada toconsume? Label this point on your diagram.Should Canada accept the deal?
- A worker in country A can produce either 5 computers or 45 tons of rice, while a worker in country B canproduce either 7 computers or 42 tons of rice. a. Graph the production possibilities curve for each country. On which point of the curve would eachcountry produce if the workers spent half of their time producing each good? b. Which country has absolute advantage? Which country has comparative advantage? In theproduction of rise Country A absolute advantage c. If there was trade, which country would specialize in the production of rice? d. At what price of computers would the countries agree to trade?When new and better ways of producing all goods and services are discovered or when the quantity of capital increases, O A. the opportunity cost of all goods decreases O B. our economy grows, but we still face scarcity and opportunity cost O C. the economy moves along its production possibilities frontier O D. the production possibilities frontier shifts inward e Text Pages Grapher Get More Help -Draw the production possibilities frontier on a scale diagram, with the production of X on the horizontal axis and the production of Y on the vertical axis Annual Production of Y Annual Production of X 0 20 45 60 70 75 1300 1200 900 6:00 350 0 b. If the economy is producing 45 units of X and 900 units of Y, what is the opportunity cost of producing an extra 15 units of X. Show on graph. C. If the economy is producing 20 units of X and 800 units of Y, what is the opportunity cost of producing an extra 10 units of X. Show on graph.
- OSA Moving from point B to D Good Y A O A. ii only OB. i and ii C O C. i only O D. i, ii and iii B D i. Economic growth takes place ii. The production technique for producing good Y remains the same iii. More of both goods can be produced Good XWhich one of the following concepts is illustrated by a production possibilities frontier? Select one: A. monetary exchange B. consumption C. profit D. investment O E. the tradeoff between producing one good versus anotherThe Marope Economy has the capacity to produce the goods and services that are outlined in Table 1 below. You are required to:a. Draw a Production Possibility Frontier (PPF) and list all efficient points of production.b. Marope Economy wishes to produce 520 billion units of consumer goods. Plot this output onthe Frontier and state whether this is an efficient point or not.Table 1 – Production Possibilities Output (billions of units per year) Consumer goods Consumer servicesPart BA B480 420 0 120C D240 0 240 300 Use graphs to demonstrate how the following factors will change the PPF.a. A decrease in migrationb. An increase in natural resourcesc. Changes in technology
- Name a way that your family interacts in the marketsfor the factors of production and a way that itinteracts in the markets for goods and services1.a Explain the economic link between scarcity, choice and opportunity cost. 1.b Suppose there are two countries (South Africa and Chile) producing two products(Capital goods and consumer goods) with production possibilities per person inSouth Africa lower than in Chile. Use the PPF to substantiate how the future growthof the two countries will change if South Africa devoted a lot of its resources toproducing capital goods today.Draw and explain a productino possibilities frontier for an economy that produces milk and cookies. What happens to this frontier if disease kills half of the economy's cows?