Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN: 9781305971509
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 3.1, Problem 1QQ
To determine
The graphical representation of production possibility frontier .
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Draw an example of a production possibilities frontier for Robinson Crusoe, a shipwrecked sailor who spends his time gathering coconuts and catching fish. Does this frontier limit Crusoe's concumption of coconuts and fish if he lives by himself? Does he face the same limits if he can trade with natives on the island?
Consider the graph of the production possibility frontier for country Z below. A combination of clothing and cell phones that would meet the productive efficiency would be:
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What would a straight-line production possibilities frontier between grape juice and apple juice on Fruity Goodness Orchards say about opportunity costs?
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Principles of Macroeconomics (MindTap Course List)
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- The following graphs show the production possibilities frontiers (PPFS) for Shenandoah and Denali. Both countries produce almonds and basil, each initially (i.e., before specialization and trade) producing 18 million pounds of almonds and 9 million pounds of basil, as indicated by the grey stars marked with the letter A. BASIL (Millions of pounds) 48 42 36 30 24 18 PPF ୯ 12 6 Cả 0 0 I I 6 Shenandoah 18,9 12 18 24 30 36 ALMONDS (Millions of pounds) 42 48 BASIL (Millions of pounds) 48 42 36 30 24 18 12 6 0 0 PPF 6 Denali 12 18 24 30 36 42 48 ALMONDS (Millions of pounds) ? Shenandoah has a comparative advantage in the production of , while Denali has a comparative advantage in the production of . Suppose that Shenandoah and Denali specialize in the production of the goods in which each has a comparative advantage. After specialization, the two countries can produce a total of million pounds of basil. million pounds of almonds andarrow_forwardWhat can you say about all three of these Production Possibilities Frontiers?arrow_forwardExplain the usefulness of a Production Possibilities Frontier and how it could be applied to an example to support an economic argumentarrow_forward
- Bread В A • Steel The graph shows the production possibility frontier for a country that can use it's resources to make either bread or steel. According to the graph, the opportunity cost of shifting reasources from making bread to making steel is increasing constant decreasingarrow_forwardThe graph below shows a production possibilities frontier for shoes and candy bars in Z-land. Using the straight-line tool, add a PPF for Y-land. If Y-land uses all its resources to produce shoes, it can make 100 pairs. If it uses all its resources to make candy bars, it can make 400. Assume that the PPF is linear. To refer to the graphing tutorial for this question type, please click here. 1 Shoes 800 750 700 650 600 550 500 450 400 350 300 250 200 1 PPF for Z-land and Y-land SUBMIT ANSWERarrow_forwardconsider a production possibilities frontier that measures movies and other goods and services. how does the ppf illustrate production efficiency?arrow_forward
- Suppose you have midterms in economics and astronomy tomorrow, and you only have four hours left to study. The accompanying table provides the combinations of time spent studying economics and astronomy and your expected exam scores. Hours spent studying economics Economics exam score Hours spent studying astronomy Astronomy exam score 0 60 0 70 1 80 1 83 2 90 2 87 3 95 3 90 4 98 4 92 a. Draw a production possibilities frontier to illustrate your study options. What is the opportunity cost, in terms of your grades, of studying one extra hour for economics or one extra hour for astronomy? b. If your goal is to maximize your combined exam scores, how many hours should you spend studying each subject? c. Your laptop dies and refuses to start up. All your notes and class materials are saved on its hard drive. How do your production possibilities change? Illustrate in your graph from part (a).arrow_forwardDraw a production possibilities frontier (PPF) with missiles on the horizontal axis and butter on the vertical axis, illustrating these options, showing points A – F. Option missiles butter A 0 30 B 1 28 C 2 24 D 3 18 E 4 10 F 5 0 Can this country produce 24 units of butter and 4 missiles? Explain. Where would this point lie on the PPF? What is the trade-off when moving from point A to B? What is the opportunity cost of increasing missile production from 3-4 units? what is the opportunity cost of increasing butter production from 18-24 units? What is the maximum amount of butter that can be produced, if all resources are devoted to butter production? Can this country produce 2 missiles and 10 units of butter? Yes or no? Where would this point lie relative…arrow_forwarddraw a production possibility frontier showing a combination of two goods that a country could produce and an area of inefficiency and another unattainablearrow_forward
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