Macroeconomics (7th Edition)
7th Edition
ISBN: 9780134738314
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Question
Chapter 2, Problem 2.1.8PA
Subpart (a):
To determine
The production possibilities frontier (
Subpart (b):
To determine
The production possibilities frontier (PPF) curve between consumption and capital goods.
Subpart (c):
To determine
The production possibilities frontier (PPF) curve between consumption and capital goods.
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Students have asked these similar questions
Briefly explain how an economy could shift production from an inefficient point of production (such as point E in the picture above) to an efficient point of production (such as point C).
Which point(s) are efficient? Briefly explain why.
B
Points A, B, C, and D because they are attainable.
Points B, C, and D because this is where maximum output is produced with available resources.
Point A because it is inside the production possibilities frontier.
Point E because it is where the most capital and consumption goods combined are produced.
A
D
Point B because it is where the most resources are used to produce capital goods.
Which point(s) are inefficient? Briefly explain why.
PPF
O A. Points B, C, and D because they are on the production possibilities frontier.
O B. Points B, C, D, and E because they are unattainable.
Consumption goods
O C. Points A, B, C, and D because they are attainable.
O D. Point E because it is unattainable.
OE. Point A because production there is not using all available resources.
At which point is the country's future growth rate likely to be the highest? Briefly explain why.
O A. Point E because it is where the production possibilities frontier…
Suppose the United Kingdom produces two types of goods: agricultural and capital. The following diagram shows its current production possibilities
frontier for corn, an agricultural good, and airplanes, a capital good.
Drag the production possibilities frontier (PPF) on the graph to show the effects of a technological advance in medicine that allows workers to live
longer and have extended careers.
Note: Select either end of the curve on the graph to make the endpoints appear. Then drag one or both endpoints to the desired position. Points will
snap into position, so if you try to move a point and it snaps back to its original position, just drag it a little farther.
360
300
PPF
240
180
PLANES (Thousands)
C
Chapter 2 Solutions
Macroeconomics (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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- One of the proposals that arose in a previous year's federal budget plan was to reduce the amount of money that people could set aside in their tax-extempt 401k savings plans.How would this proposal affect the economy's production possibilities frontier?use a graph to illustrate your answer.arrow_forwardBob and Cho are farmers. Each one owns a 20-acre plot of land. The following table shows the amount of corn and rye each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing corn or rye or to produce corn on some of the land and rye on the rest. Corn Rye (Bushels per acre) (Bushels per acre) Bob 10 5 Cho 40 8 On the following graph, use the blue line (circle symbol) to plot Bob's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Cho's PPF. 200 Bob's PPF 180 160 F3 0+ F4 H r F5 M F7 1 F8 # F9 CI F10arrow_forwardSuppose the fictional country of Everglades produces two types of goods: agricultural and capital. The following diagram shows its current production possibilities frontier for millet, an agricultural good, and electric scooters, a capital good. Drag the production possibilities frontier (PPF) on the graph to show the effects of a breakout of avian flu that sickens millions of workers. Note: Select either end of the curve on the graph to make the endpoints appear. Then drag one or both endpoints to the desired position. Points will snap into position, so if you try to move a point and it snaps back to its original position, just drag it a little farther. PPF0701402102803504201801501209060300ELECTRIC SCOOTERS (Thousands)MILLET (Millions of bushels) PPFarrow_forward
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