Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Question
Chapter 2, Problem 12SQ
To determine
The implication of the combination outside the PPC.
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Which of the following are made constant when applying the production possibilities curve theory?
Select one:
a. Trading rate between goods
b. Total exports and imports
c. Total number of factors of productions
d. International pricing
Explain how (if at all) each of the following events affects the location of a country’s production possibilities curve:a. The quality of education increases.b. The number of unemployed workers increases.c. A new technique improves the effifi ciency of extracting copper from ore.d. A devastating earthquake destroys numerous production facilities.
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 goods
Chapter 2 Solutions
Micro Economics For Today
Ch. 2.6 - Prob. 1YTECh. 2.7 - Prob. 1GECh. 2 - Prob. 1SQPCh. 2 - Prob. 2SQPCh. 2 - Prob. 3SQPCh. 2 - Prob. 4SQPCh. 2 - Prob. 5SQPCh. 2 - Prob. 6SQPCh. 2 - Prob. 7SQPCh. 2 - Prob. 8SQP
Ch. 2 - Prob. 9SQPCh. 2 - Prob. 10SQPCh. 2 - Prob. 11SQPCh. 2 - Prob. 12SQPCh. 2 - Prob. 1SQCh. 2 - Prob. 2SQCh. 2 - Prob. 3SQCh. 2 - Prob. 4SQCh. 2 - Prob. 5SQCh. 2 - Prob. 6SQCh. 2 - Prob. 7SQCh. 2 - Prob. 8SQCh. 2 - Prob. 9SQCh. 2 - Prob. 10SQCh. 2 - Prob. 11SQCh. 2 - Prob. 12SQCh. 2 - Prob. 13SQCh. 2 - Prob. 14SQCh. 2 - Prob. 15SQCh. 2 - Prob. 16SQCh. 2 - Prob. 17SQCh. 2 - Prob. 18SQCh. 2 - Prob. 19SQCh. 2 - Prob. 20SQ
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- The only way that a society can produce outside the production possibilities curve is Question 9 options:by producing efficiently.through economic growth.by obeying the Law of Increasing Relative Cost.to use the concept of opportunity cost.arrow_forwardRefer to the following production possibilities curves. Curve (a) is the current curve for the economy. Given production possibilities curve (a), the combination of capital and consumer goods indicated by point L: Consumer goods N Select one: O (a) (b) Capital goods a. would entail an inefficient use of society's resources. b. is beyond the productive capacity of this society. c. would entail substantial unemployment. d. suggests the productive capacity of the system is declining.arrow_forwardDraw a production possibilities curve showing the number of apples and pears that one person can pick in a given time period. Show efficient, inefficient, and impossible levels of output. Explain why a combination of apples and pears (i.e. a level of output at a middle point along the curve) gives you more fruit that if you had picked only apples.  The highest quality cricket bats, used by Test cricketers, sell for over $1,000AUD. They are made from a special type of willow tree grown specifically for that purpose. Similar bats, made from cheaper willow, sell for less than $200.  Suppose a plant disease destroys half of the world’s high quality willow trees. The stock of cheaper willow trees is unaffected.  (a) Explain how the market for high quality cricket bats might be affected by this change. (b) Explain how the market for cricket bats made from cheaper willow might be affected by the change in the market for high quality bats.arrow_forward
- Consider production possibilities of goods and services in China, Since 1980, the population of China has grown by over 40%, from just under 1.0 billion to more than 1.4 billion people. In addition, there has been massive investment in both human and physical capital. Given these changes, we can expect that China's production possibilities frontier has shifted and become curved (bowed outward). Answers A - D A.outward; more B.inward, more C.inward; less D.outward, lessarrow_forwardAssuming Line BB is our original curve, suppose there is a major technological breakthrough in the consumer goods industry, and the new technology is widely adopted. Which curve in the diagram would represent the new production possibilities curve?arrow_forwardEfficiency in the production possibilities model Suppose the fictional country of Shenandoah produces only two goods: millet and handbags. The following graph plots Shenandoah's current production possibilities frontier, and includes six different output combinations given by black points (plus symbols) labeled A to F.  Complete the following table by indicating whether each point represents output combinations that are inefficient, efficient, or unattainable. Check all that apply.    Point Inefficient Efficient Unattainable A     B     C     D     E     Farrow_forward
- How would each of the following situations affect a nation's production possibilities curve? A law is passed that makes community college tuition free for all U.S. citizens. The PPC shifts and to the An unexpectedly mild spring results in a bumper crop of citrus fruit in both Florida and California, The PPC shifts and to the A change in immigration laws significantly increases the number of immigrant workers entering the country. The PPC shifts and to the The amount of time that unemployed workers can collect unemployment insurance is increased from 26 weeks to 96 weeks during a recession, resulting in workers remaining unemployed for a longer period of time. This the PPC. An innovation in desalinization technology allows for the more efficient conversion of salt water to fresh water. The PPC shifts A radiation leak at a nuclear power plant results in the long-term evacuation of a 10,000 square-mille area, which significantly reduces the nation's productive capacity The PPC shifts and…arrow_forwardCan the Production Possibilities Curve shift left? If not, explain why. If it can, explain what might cause this to happen.arrow_forwardAny point on a country's production possibilities curve represents a combination of two goods that an economy will never be able to produce. can produce using all available resources and technology. can produce using some portion, but not all, of its resources and technology. may be able to produce in the future with more resources and/or technology.arrow_forward
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