Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Chapter 1, Problem 7RQ
To determine
Impact of technological development on PPF .
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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 that United States is currently producing two goods: tanks and cars using its current resources. As the country is
preparing for a war, it intends to produce more tanks and to do so, it starts coverting its car factories into tank factories.
Which of the following is true?
O The production possibilities curve will show the increasing opportunity costs as more tank is produced.
The production possibilities curve for cars and tanks will shift outward.
O The production possibilities curve will show decreased opprotunity costs as more tank is produced.
O The production possibilities curve will shift inward.
Chapter 1 Solutions
Microeconomics
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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- Suppose a country is producing $20 million of real GDP. If the economy grows at 10 percent per year, approximately how many years will to take for real GDP to grow to $80 million? Select one: O A. 14 O B. 3.5 O C 30 O D. 4 O E. 7arrow_forwardO Chapter 17 Assignment - ECN204 021 - Introductory Macroeconomics - W2023 Chapter 17 Assignment i Sc 9 8 02:47:45 Mc Graw ! 1 Q U * 00 8 + ( 1 b Success Confirmatio 9 ) 0 Help 0 Parrow_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
- If Korea is currently producing at efficiency, and it proceeds to increase the production of missiles, then, as long as nothing else changes, its: O A. Production-possibilities curve will shift outward. O B. Production-possibilities curve will shift inward. O c. Production of non-military goods will increase. O D. Production of non-military goods (civilian goods) will decrease.arrow_forwardWhat happens if a country produces a combination of goods that efficiently uses all of the resources available in the economy? 100- O A. The country has eliminated scarcity. 80 O B. The country is maximizing its opportunity cost. O C. The country is operating on its production possibilities frontier. O D. All of the above occur if a country uses all available resources. 40 30 F 20- 10 50 0- 20 40 60 80 100 Quantity of SUVS produced per day Quantity of sedans produced per dayarrow_forwardWhich of the following is correct about the production possibilities curve? An economy can produce only on the production possibilities frontier line given its current available resources and technology. O An economy can produce at any point inside or outside the production possibilities frontier given its current available resources and technology. O An economy can produce at any point inside the production possibilities frontier, but not on the frontier without discovery of new resources or technology or real economic growth. O An economy can produce at any point on or inside the production possibilities frontier, but not outside the frontier without discovery of new resources or technology or real economic growth. O An economy can produce at any point on or inside the production possibilities frontier, but government price controls are needed for economy to produce beyond the frontier line.arrow_forward
- Betty and Ann live on a desert island. With a day's labor, Ann can produce 6 fish or 4 coconuts; Betty can produce 3 fish or 1 coconut. Betty's opportunity cost of producing 1 fish is and she should specialize in the production of O 2/3 coconut per fish; coconuts O 1/3 coconut per fish; fish 01 coconut per fish; fish O4 coconuts per fish; fisharrow_forwardFigure #1 Wheat z. Y W. Tractorsarrow_forwardThe graph below shows production possibilities frontiers for Cornelius and David, two priests that aid the Mondoshawan race. David is Cornelius' apprentice, and they each spend their time either deciphering old prophecies or developing plans to save the world (which comes in handy later). Use this information to answer the following 3 questions. Plans 10 9 8 7 6 LO 5 4 3 2 1 8° Cornelius David 0 1 2 3 4 5 c. Both (a) and (b). d. Neither (a) nor (b). 6 7 8 b. 10 translations and 4 plans. C. 5 translations and 11 plans. d. 9 translations and 9 plans. 9 Translations 10 1. (Cornelius and David) Which of the following statements is true? a. Cornelius' opportunity cost of one translation is ½ of a plan. b. Cornelius' opportunity cost of one translation is less than David's opportunity cost of one translation. 2. (Cornelius and David) If David and Cornelius engage in trade, which of the following points is both feasible and efficient in production? a. 18 translations and 14 plans.arrow_forward
- Which of the following statements is true? O a. In a world of inefficiently used scarce resources, more production of one good necessarily means less production of some other good. b. Efficiency implies that it is impossible to get more of one good without getting less of another. O c. Even if a country has unemployed resources, it can still be operating on its production possibilities frotier (PPF). O d. The law of increasing opportunity costs assumes that all people have the same ability to produce goods.arrow_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_forwardAssume that your company produces two goods: laptops and tablets. Assume aslo that your company has limited resources( including time) to devote to producing these items. Now assume that the laptop team does something to improve the efficiency of making laptops, while the tabley holds to old methods. Given the change you can a) only increase your production of laptops b) only increase your production of tablets c) increase production of both items d) not increase your production in either tablets or laptops.arrow_forward
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