Answered: 1.3) The figure below depicts the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Please tell me which of the following multiple choice are correct for question 1.3) and 1.4) and 1.5) tell me only the ones which are correct.Thank you.

1.3)

The figure below depicts the production function of grain for farmers under average growing conditions with the currently available technology.

(SEE PICTURE ATTACHED)

Select one or more:

a. In a year with exceptionally good weather conditions, the production function curve will be higher and parallel to the curve above.

b. A discovery of new high yielding crop seeds would tilt the production function curve higher anti-clockwise, pivoted at the origin.

c. In a year of bad drought the production curve can turn downwards for large numbers of farmers.

d. If there is an upper-limit on the amount of grain that can be produced, then the curve will end up horizontal for large number of farmers.

1.4)

An example of innovation rent is:

Select one or more:

a. The cost of opening a new factory.

b. The return to an entrepreneur from introducing a new technology.

c. The opportunity cost of production.

d. The cost an entrepreneur must pay to the inventor of a new technology.

1.5)

For any two goods (things you would like more of):

Select one or more:

a. Indifference curves are downward-sloping.

b. Indifference curves can sometimes cross.

c. Indifference curves can have straight line sections.

d. Indifference curves cannot have kinks.

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Slope = 732,000 / 1,600 = 458
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Number of farmers
Kilogrammes of grain produced (thousands)

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