EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
expand_more
expand_more
format_list_bulleted
Question
Chapter 1, Problem 1.7P
a)
To determine
To describe: Whether the points appear to lie along a straight line and that straight line possibility frontier.
b)
To determine
To describe: The output levels of X = 400, Y = 200 or X = 300, Y = 300 are inefficient and to show these output levels on the graph.
c)
To determine
To describe: The output levels of X = 500 Y = 350 are unattainable in this economy
d)
To determine
To describe: The
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Suppose there is a simple hypothetical economy in which the only industry is cloud computing. In the cloud computing field, productivity—the amount of goods and services a worker can produce per hour—is measured by the number of lines of code one programmer authors per hour.
Suppose that initially Denali uses 1 million hours of labor per week to produce pistachios and 3 million hours per week to produce chinos, while Sequoia uses 3 million hours of labor per week to produce pistachios and 1 million hours per week to produce chinos. As a result, Sequoia produces 24 million pounds of pistachios and 32 million pairs of chinos, and Denali produces 12 million pounds of pistachios and 72 million pairs of chinos. Assume there are no other countries willing to engage in trade, so, in the absence of trade between these two countries, each country consumes the amount of pistachios and chinos it produces.
Sequoia's opportunity cost of producing 1 pound of pistachios is4 pairs of chinos, and Denali's opportunity cost of producing 1 pound of pistachios is2 pairs of chinos. Therefore,Sequoia has a comparative advantage in the production of pistachios, andDenali has a comparative advantage in the production of chinos.
Suppose that each country…
Reproduce the diagram for the Robinson Crusoe economy for a firm that has constant returns to scale. Under what conditions will it be ancient for the firm not to produce? What is the consumption level of the consumer in such a case? Provide an interpretation of this possibility.
Chapter 1 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 1.2 - Prob. 1MQCh. 1.2 - Prob. 2MQCh. 1.3 - Prob. 1TTACh. 1.3 - Prob. 2TTACh. 1.4 - Prob. 1TTACh. 1.4 - Prob. 2TTACh. 1.4 - Prob. 1MQCh. 1.4 - Prob. 2MQCh. 1.4 - Prob. 1.1MQCh. 1.4 - Prob. 1.2MQ
Ch. 1.5 - Prob. 1TTACh. 1.5 - Prob. 2TTACh. 1 - Prob. 1RQCh. 1 - Prob. 2RQCh. 1 - Prob. 3RQCh. 1 - Prob. 4RQCh. 1 - Prob. 5RQCh. 1 - Prob. 6RQCh. 1 - Prob. 7RQCh. 1 - Prob. 8RQCh. 1 - Prob. 9RQCh. 1 - Prob. 10RQCh. 1 - Prob. 1.1PCh. 1 - Prob. 1.2PCh. 1 - Prob. 1.3PCh. 1 - Prob. 1.4PCh. 1 - Prob. 1.5PCh. 1 - Prob. 1.6PCh. 1 - Prob. 1.7PCh. 1 - Prob. 1.8PCh. 1 - Prob. 1.9PCh. 1 - Prob. 1.10P
Knowledge Booster
Similar questions
- The following graph shows the production possibilities curve for an economy that produces Consumption goods and Capital goods. Use the graph to answer the following questions A) How do you describe what is happening as the economy moves from point P to point L? (discuss it in terms of economic efficiency) B) Which combination - K or M - can lead to faster economic growth in the future? How do you know? Explain your answer. C) If the economy is currently operation at point L, what is the opportunity cost of producing 10 more Capital goods (Moving from combination L to combination M)?arrow_forwardThe Covid-19 pandemic has created changes in consumer demands for products with related impacts on the availability and prices of the inputs used to produce those products. * Please read the Wall Street Journal article "Consumers Open Wallets, And Factories Can't Keep Up" (February 23, 2021) located under Week 6 "Modules" [March 10] before answering the questions given below. *Note: Markets for inputs used to produce a final good or service are called that product's "supply chain." For example, a boat manufacturer might buy outboard motors produced by another company to install in the boat it is producing (see Wall Street Journal article). 1. The Wall Street Journal article reports that beginning in late spring and early summer of 2020, there was a "sharp rebound in consumer demand" for a variety of manufactured products (e.g. cars, boats, furniture, power tools and physical fitness equipment). Using furniture as an example and Simplicity Sofas as a representative producer of sofa…arrow_forwardSuppose that the table presented below shows an economy's relationship between real output and the inputs needed to produce that output: Input Quantity 300 225 150 Real GDP $400 300 200 Instructions: Enter your answers rounded to 2 decimal places. a. What is the level of productivity in this economy? b. What is the per-unit cost of production if the price of each input unit is $3? c. Assume that the input price increases from $3 to $4 with no accompanying change in productivity. What is the new per-unit cost of production? In what direction would the $1 increase in input price push the economy's aggregate supply curve? Click to select What effect would this shift of aggregate supply have on the price level and the level of real output? Both the price level and real output would remain the same. The price level would decrease and real output would remain the same.arrow_forward
- The productive capability of an economy is such that to produce 5 units of military good it takes 2 workers to be employed while 10 units of consumer goods require 3 workers. Resources are limited in such a way that only 75 units of military good can be produced when all resources are employed. a) Construct the production possibility schedule and curve for this economy. b) Graphically represent what would happen if 12 additional workers were added to the economy. c) Graphically represent what would happen if the productivity of the workers were reduced to 2 units of military good and 5 units of consumer goods. d) Graphically represent what would happen if productivity for military goods remained the same but it now required 2 workers to produce 10 units of consumer goodsarrow_forward15. Consider an economy divided into an agricultural sector (A) and an industrial sector (I). To produce 4- one unit in sector A requires unit from A and unit from I. To produce one unit in sector I requires unit from A and 4 unit from I. Suppose final demands in each of the two sectors are 60 units. Write down the input-output matrix equation for this economy, and then find the number of units that have to be produced in each sector in order to meet the final demands.arrow_forwardProduction and consumption lie on the same isovalue line.’ Explain this statement with the help of a graph.arrow_forward
- An economy has 8 units of labor and 8 units of capital that are allocated between industry X, with the DRTS production function x = K^(1/4)L^(1/4), and industry Y, with the CRTS production function y = K^(1/2)L^(1/2). Derive and graph the Production Possibilities Frontier for this economy. All consumers believe X and Y are perfect complements with tastes U = min (Y, 2X). Calculate production levels that are consistent with tastes and show these in your diagram.arrow_forward(a) Explain the characteristics of the production function used in the Heckscher-Ohlin (H-O)model. (b) Explain with the help of a graph how we can determine the specific combination oftwo goods that can be produced in the economy in the H-O model.arrow_forwardSuppose that the table presented below shows an economy's relationship between real output and the inputs needed to produce that output: Input Quantity Real GDP 150.0 $400 112.5 300 75.0 200 Instructions: Enter your responses answers rounded to 2 decimal places. a. What is the level of productivity in this economy? b. What is the per-unit cost of production if the price of each input unit is $2? 2$ C. Assume that the input price increases production? $2 to $3 wit no accompanying change in productivity. What the new per-unit cost of 2$ In what direction would the $1 increase in input price push the economy's aggregate supply curve? (Click to select) V What effect would this shift of aggregate supply have on the price level and the level of real output? O The price level would decrease and real output would remain the same. O The price level would increase and real output would decrease. O Both the price level and real output would remain the same. O The price level would decrease and…arrow_forward
- d point f. point e. point b. point d. point h. B Refer to the production possibility graph above. Assume that the economy is in equilibrium at point e. If there is an increase in the wage rate, the new equilibrium is most likely to bearrow_forwardSuppose that the table presented below shows an economy's relationship between real output and the inputs needed to produce that output: Input Quantity Real GDP 150.0 $400 112.5 300 75.0 200 Instructions: Enter your responses answers rounded to 2 decimal places. a. What is the level of productivity in this economy? b. What is the per-unit cost of production if the price of each input unit is $2? C. Assume that the input price increases from $2 to $3 with no accompanying change in productivity. What is the new per-unit cost of production? In what direction would the $1 increase in input price push the economy's aggregate supply curve? (Click to select) What effect would this shift of aggregate supply have on the price level and the level of real output? O The price level would decrease and real output would remain the same. O The price level would increase and real output would decrease. O The price level would decrease and real output would increase. O Both the price level and real…arrow_forwardBriefly explain how the economy pictured above could shift production from point E (an inefficient point of production) to point C (an efficient point of production) ?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Microeconomics (MindTap Course List)EconomicsISBN:9781305971493Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:Cengage Learning