Microeconomics (7th Edition)
7th Edition
ISBN: 9780134737508
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Question
Chapter 2, Problem 2.1.4PA
Subpart (a):
To determine
The production possibilities frontier (
Subpart (b):
To determine
The production possibilities frontier (PPF) curve for soybeans and cotton.
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Microeconomics > Page 2 of 5
2. Draw and explain a production possibilities frontier for an economy that produces
milk and cookies. What happens to this frontier if disease kills half of the economy's
cows?
3. Consider the following events: Scientists reveal that consumption of oranges.
decreases the risk of diabetes, and at the same time, farmers use a new fertilizer that
makes orange trees more productive. Illustrate and explain what effect these
changes have on the equilibrium price and quantity of oranges.
4. Imagine that you are a nonsmoker sharing a room with a smoker. According to
the Coase theorem, what determines whether your roommate smokes in the room?
Is this outcome efficient? How do you and your roommate reach this solution?
5. Charlie loves watching Teletubbies on his local public TV station, but he never
sends any money to support the station during its fundraising drives.
(a) What name do economists have for people like Charlie?
(b) How can the government…
D). Draw a Production Possibilities Frontier for two goods: airplanes and soybeans. Choose the combination of
output you prefer and, accordingly, the slope of your preference. Show three different points on the graph that
represent an inefficient, an efficient, and a not feasible outcomes, respectively.
E). Define positive and normative statements. Give examples.
Draw a production possibilities curve for food and clothing. If you are operating on the curve, what is the opportunity cost of producing more clothing? If you are on the curve, is it possible to increase production of one good without decreasing the production of the other?
Chapter 2 Solutions
Microeconomics (7th Edition)
Ch. 2 - Prob. 1TCCh. 2 - Prob. 2TCCh. 2 - Prob. 2.1.1RQCh. 2 - Prob. 2.1.2RQCh. 2 - Prob. 2.1.3RQCh. 2 - Prob. 2.1.4PACh. 2 - Prob. 2.1.5PACh. 2 - Prob. 2.1.6PACh. 2 - Prob. 2.1.7PACh. 2 - Prob. 2.1.8PA
Ch. 2 - Prob. 2.1.9PACh. 2 - Prob. 2.1.10PACh. 2 - Prob. 2.1.11PACh. 2 - Prob. 2.1.12PACh. 2 - Prob. 2.1.13PACh. 2 - Prob. 2.1.14PACh. 2 - Prob. 2.2.1RQCh. 2 - Prob. 2.2.2RQCh. 2 - Prob. 2.2.3PACh. 2 - Prob. 2.2.4PACh. 2 - Prob. 2.2.5PACh. 2 - Prob. 2.2.6PACh. 2 - Prob. 2.2.7PACh. 2 - Prob. 2.2.8PACh. 2 - Prob. 2.2.9PACh. 2 - Prob. 2.2.10PACh. 2 - Prob. 2.2.11PACh. 2 - Prob. 2.2.12PACh. 2 - Prob. 2.2.13PACh. 2 - Prob. 2.2.14PACh. 2 - Prob. 2.2.15PACh. 2 - Prob. 2.3.1RQCh. 2 - Prob. 2.3.2RQCh. 2 - Prob. 2.3.3RQCh. 2 - Prob. 2.3.4RQCh. 2 - Prob. 2.3.5RQCh. 2 - Prob. 2.3.6RQCh. 2 - Prob. 2.3.7PACh. 2 - Prob. 2.3.8PACh. 2 - Prob. 2.3.9PACh. 2 - Prob. 2.3.10PACh. 2 - Prob. 2.3.11PACh. 2 - Prob. 2.3.12PACh. 2 - Prob. 2.3.13PACh. 2 - Prob. 2.3.14PACh. 2 - Prob. 2.3.15PACh. 2 - Prob. 2.3.16PA
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Similar questions
- If a producer is producing at point z and wants to move to point X, then what is the trade-off? How do you find trade-off? 20 gallons of milk 3 lbs of cheese 7 lbs of cheese 10 gallons of milkarrow_forwardDraw and explain a production possibilities frontier for an economy that produces cheese and milk. What happens to this frontier if a disease kills half of the economy’s cows? Use a production possibilities frontier to describe the idea of “efficiency.” kindly solve both parts.arrow_forwardIf a new type of seed were developed that made it easier to grow a particular crop, how would the production possibilities frontier for a farmer choosing between that crop and another one change?arrow_forward
- Consider the production possibilities frontier (PPF) that shows the trade-off between the production of cotton and the production of soybeans depicted in the figure to the right. Use the three-point curved line drawing tool to show the effect that improved fertilizers would have on the initial production possibilities frontier by drawing a new production possibilities frontier. Properly label this curve. Carefully follow the instructions above, and only draw the required objects. FRANarrow_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_forwardWhat does a Production Possibilities Curve depict? What is the Law of Demand? What components will cause a Shift in the Demand curve?arrow_forward
- Economic theory indicates that as any economic agent tries to extend any productive activity further, it becomes increasing more difficult to do so. What is this particular theory called? Select one: a. Law of Comparative Advantage b. Law of Demand c. Law of Ceteris Paribus d. Law of Diminishing Returnsarrow_forwardDraw a production possibilities frontier diagram for a farm able to produce corn or soybeans. What does a production possibilities frontier illustrate?arrow_forward
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