Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
20th Edition
ISBN: 9780078021756
Author: McConnell, Campbell R.; Brue, Stanley L.; Flynn Dr., Sean Masaki
Publisher: McGraw-Hill Education
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Question
Chapter 1, Problem 6DQ
To determine
The slope of a budget line that illustrates opportunity cost , trade-offs, scarcity, and the effect of limited incomes.
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5. Refer to the following production possibilities table for con.
sumer goods (automobiles) and capital goods (forklifts): LO1.6
a. Show these data graphically. Upon what specific assump-
tions is this production possibilities curve based?
b. If the economy is at point C, what is the cost of one more
automobile? Of one more forklift? Which characteristic of
the production possibilities curve reflects the law of increas-
ing opportunity costs: its shape or its length?
c. If the economy characterized by this production possibilities
table and curve is producing 3 automobiles and 20 forklifts,
what could you conclude about its use of its available
resources?
d. Is production at a point outside the production possibilities
curve currently possible? Could a future advance in technol-
ogy allow production beyond the current production possi-
bilities curve? Could international trade allow a country to
consume beyond its current production possibilities curve?!…
1. Improvements in technology.
2. Increases in the supply (stock) of capital goods
3. Purchases of expanding output.
4. Obtaining the optimal combination of goods, each at least-cost production.
5. Increases in the quantity and quality of natural resources.
6. Increases in the quantity and quality of human resources.
Multiple Choice
Which set of items in the accompanying list would move an economy from a point inside its production possibilities curve to a point on its
production possibilities curve?
O
12.5, and 6 only
Help
3 and 4 only
Save & Exit
Suppose Duncan budgets $20 a week for entertainment. He can either go bowling for $4 a game,
or play mini golf for $6 a game. Duncan maximizes his total utility by bowling twice and playing two
games of mini golf. If the marginal utility from his second game of mini golf equals 12, what is the
marginal utility per dollar from his second game of bowling?
O 2
4-
Chapter 1 Solutions
Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
Ch. 1.2 - Prob. 1QQCh. 1.2 - Prob. 2QQCh. 1.2 - Prob. 3QQCh. 1.2 - Prob. 4QQCh. 1.A - Prob. 1ADQCh. 1.A - Prob. 2ADQCh. 1.A - Prob. 3ADQCh. 1.A - Prob. 1ARQCh. 1.A - Prob. 2ARQCh. 1.A - Prob. 1AP
Ch. 1.A - Prob. 2APCh. 1.A - Prob. 3APCh. 1.A - Prob. 4APCh. 1.A - Prob. 5APCh. 1.A - Prob. 6APCh. 1.A - Prob. 7APCh. 1.A - Prob. 8APCh. 1 - Prob. 1DQCh. 1 - Prob. 2DQCh. 1 - Prob. 3DQCh. 1 - Prob. 4DQCh. 1 - Prob. 5DQCh. 1 - Prob. 6DQCh. 1 - Prob. 7DQCh. 1 - Prob. 8DQCh. 1 - Prob. 9DQCh. 1 - Prob. 10DQCh. 1 - Prob. 11DQCh. 1 - Prob. 1RQCh. 1 - Prob. 2RQCh. 1 - Prob. 3RQCh. 1 - Prob. 4RQCh. 1 - Prob. 5RQCh. 1 - Prob. 6RQCh. 1 - Prob. 7RQCh. 1 - Prob. 1PCh. 1 - Prob. 2PCh. 1 - Prob. 3PCh. 1 - Prob. 4PCh. 1 - Prob. 5PCh. 1 - Prob. 6PCh. 1 - Prob. 7PCh. 1 - Prob. 8P
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Similar questions
- 11.Explain how (if at all) each of the following events affects the location of a country’s production possibilities curve: LO5 a.The quality of education increases. b.The number of unemployed workers increases. c.A new technique improves the efficiency of extracting copper from ore. d.A devastating earthquake destroys numerous production facilities.arrow_forwardLast Word) Behavioral economics incorporates culture and the studies of Multiple Choice sociology and economics. psychology and economics. mathematics and economics. finance and economics. None of these choices are correct.arrow_forwardCaci, un he would spend a dollar buying a first cup of coffee? LO7.2 4. Columns 1 through 4 in the following table show the marginal utility, measured in utils, that Ricardo would get by purchasing various amounts of products A, B, C, and D. Column 5 shows the marginal utility Ricardo gets from saving. Assume that the prices of A, B, C, and D are, respectively, $18, $6, $4, and $24 and that Ricardo has an income of $106. LO7.2 a. What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility? b. How many dollars will Ricardo choose to save? c. Check your answers by substituting them into the algebraic statement of the utility-maximizing rule. nuts, coffee, or both. How big would that buuget nave LU DC DCIUIUarrow_forward
- Assume that Robyn wants to buy socks and once she finds out that the price per pair is $5. she decides to buy 4 pairs of socks. Which of the following is true? O a) The marginal benefit (or marginal utility) of the 5th pair is higher than the marginal cost of the Sth pair O b) The marginal benefit (or marginal utility) of the 4th pair must be equal to $20 O O The marginal benefit (or marginal utility) of the Sth pair must be lower than $5 O d) The marginal benefit (or marginal utility) of the first pair must be lower than 55arrow_forwardents Question 5 If your tuition is $2,000 this semester, your books cost $400, you can only work 10 rather than 40 hours per week during the 15 weeks you are taking classes and you make $12 per hour, and your room and board is $4,000 this semester (same as if not attending college), then your opportunity cost of attending college this semester is O $2,760. O $7,800. O $11,800. $2.100arrow_forwardBased on the production possibilities frontier shown below, if this economy decides to shift its resources from only producing books in order to produce 8,000 pairs of sneakers, what is the opportunity cost of producing one pair of sneakers? Books (in thousands) 12 10 8 O 2 pairs of sneakers 2 books 6 0.25 pairs of sneakers O 0.25 books Pairs of Sneakers (in thousands) 10 12arrow_forward
- Answer the question on the basis of the following two schedules, which show the amounts of additional satisfaction (marginal utility) that a consumer would get from successive quantities MUS 56 48 32 24 20 16 Units of J 1 2 3 4 5 6 7 Multiple Choice O O What level of total utility is realized from the equilibrium combination of J and K, if the consumer has a money income of $36 and the prices of J and K are $4 and $4, respectively? O 12 238 utis 40 utils 204 Units of K 1 2 3 4 5 6 7 MUK 32 28 24 20 12 10. 8arrow_forwardQuestion 4 of 18 > A farmer produces both beans and corn on her farm. If she must give up 16 bushels of corn to be able to get 6 bushels of beans, then her opportunity cost of 1 bushel of beans is 0.38 bushels of corn. O 16.00 bushels of corn. O 2.67 bushels of corn. O 2.99 bushels of corn.arrow_forwardThe production possibilities are listed below: Coconuts Pineapples 8. 2. 4 2 8. Which of the following best describes the PPF for the information above? Select one: O a. The opportunity cost of producing an additional pineapple decreases as the amount of coconuts produced decreases O b. The opportunity cost of producing an additional pineapple is the same at every point O c. The opportunity cost of producing an additional pineapple is zero at every point O d. The opportunity cost of producing an additional pineapple increases as the amount of coconuts produced increases 6. 4.arrow_forward
- What happens to the budget line if the government applies a specific tax of $1 per gallon of gasoline but does not tax other goods (assuming that the consumer will still buy more than 10 gallons per week)? What happens to the budget line if the tax applies only to purchases of gasoline in excess of 10 gallons per week? 1.) Use the line drawing tool to draw new budget constraint with the gasoline tax on all gallons of gasoline. Label this line 'L²₁ 2.) Use the multipoint curve drawing tool to draw the new budget constraint when the gasoline tax applies only to purchase of gasoline in excess of 10 gallons per week. Label this line 'L³¹. (Note: Be sure to draw the entire budget constraint, starting at a quantity of 0). Carefully follow the instructions above, and only draw the required objects. All other goods, Units per week 10 Gasoline, Gallons per week L¹ Q After plotting the final point of your multipoint curve, press the Esc key on your keyboard to end the line.arrow_forwardQ.3 (a) No of Units Consumed 1 2 4 6. Total Utility in Units/Utils 10 25 40 60 75 80 Marginal Utility in Units/Utils 15 20 15 (i) State and explain the law illustrated in the above table. (ii) Outline two assumptions underlying this law. lo 3.arrow_forwardA farmer produces both beans and corn on her farm. If she must give up 16 bushels of corn to be able to get 4 bushels of beans, then her opportunity cost of 1 bushel of beans is 0.25 bushels of corn. 16.00 bushels of corn. 4 bushels of corn. O 2.99 bushels of corn.arrow_forward
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