Microeconomics (13th Edition)
13th Edition
ISBN: 9780134744476
Author: Michael Parkin
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 2, Problem 22APA
(a)
To determine
Identify the
(b)
To determine
Draw the
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Suppose a production possibilities frontier includes the following combinations:
Cars
Washing Machines
0
1,000
100
600
200
0
Graph the PPF, assuming that it has no curved segments.
What is the cost of producing an additional car when 50 cars are being produced?
What is the cost of producing an additional car when 150 cars are being produced?
What is the cost of producing an additional washing machine when 50 cars are being produced? When 150 cars are being produced?
What do your answers tell you about opportunity costs?
Suppose you are a farmer with 20 hectares of land on which you could grow either wheat or barley.
You can allocate however much land you want to each crop.
Draw a Production Possibilities Frontier depicting this situation.
Explain what a Production Possibilities Frontier is and what the diagram represents, including
what points on, below and above the PPF represent.
Explain why the PPF that you have drawn has the shape that it does.
Is it possible to use just the PPF to find the best allocation for the crops? Explain.
On the following graph, use the blue line (circle symbol) to plot Nick's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Rosa's PPF.
Nick and Rosa are farmers. Each one owns a 12-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
Nick
12
3
Rosa
15
5
(ROSA OR NICK) has an absolute advantage in the production of corn, and (ROSA OR NICK) has an absolute advantage in the production of rye.
Nick's opportunity cost of producing 1 bushel of rye is__________bushels of corn, whereas Rosa's opportunity cost of producing 1 bushel of rye is_________ bushels of corn. Because Nick has a(HIGHER OR LOWER) opportunity cost of producing rye than Rosa, (NICK OR ROSA) has a comparative advantage in the…
Chapter 2 Solutions
Microeconomics (13th Edition)
Ch. 2.1 - Prob. 1RQCh. 2.1 - Prob. 2RQCh. 2.1 - Prob. 3RQCh. 2.1 - Prob. 4RQCh. 2.1 - Prob. 5RQCh. 2.1 - Prob. 6RQCh. 2.2 - Prob. 1RQCh. 2.2 - Prob. 2RQCh. 2.2 - Prob. 3RQCh. 2.2 - Prob. 4RQ
Ch. 2.2 - Prob. 5RQCh. 2.3 - Prob. 1RQCh. 2.3 - Prob. 2RQCh. 2.3 - Prob. 3RQCh. 2.3 - Prob. 4RQCh. 2.3 - Prob. 5RQCh. 2.3 - Prob. 6RQCh. 2.3 - Prob. 7RQCh. 2.4 - Prob. 1RQCh. 2.4 - Prob. 2RQCh. 2.4 - Prob. 3RQCh. 2.4 - Prob. 4RQCh. 2.4 - Prob. 5RQCh. 2.4 - Prob. 6RQCh. 2.4 - Prob. 7RQCh. 2.5 - Prob. 1RQCh. 2.5 - Prob. 2RQCh. 2.5 - Prob. 3RQCh. 2 - Prob. 1SPACh. 2 - Prob. 2SPACh. 2 - Prob. 3SPACh. 2 - Prob. 4SPACh. 2 - Prob. 5SPACh. 2 - Prob. 6SPACh. 2 - Prob. 7SPACh. 2 - Prob. 8SPACh. 2 - Prob. 9SPACh. 2 - Prob. 10SPACh. 2 - Prob. 11APACh. 2 - Prob. 12APACh. 2 - Prob. 13APACh. 2 - Prob. 14APACh. 2 - Prob. 15APACh. 2 - Prob. 16APACh. 2 - Prob. 17APACh. 2 - Prob. 18APACh. 2 - Prob. 19APACh. 2 - Prob. 20APACh. 2 - Prob. 21APACh. 2 - Prob. 22APACh. 2 - Prob. 23APACh. 2 - Prob. 24APACh. 2 - Prob. 25APA
Knowledge Booster
Similar questions
- Diego and Kris are roommates. They spend most of their time studying, but they leave some time for their favorite activities: making pizza and brewing root beer. Diego takes 4 hours to brew a gallon of root beer and 2 hours to make a pizza. Kris takes 6 hours to brew a gallon of root beer and 4hours to make a pizza. a) What is each roommate's opportunity cost of making a pizza? Who has the absolute advantage in making pizza? Who has the comparative advantage in making pizza? b) If Diego and Kris trade foods with each other, who will trade away pizza in exchange for root beer? c) The price of pizza can be expressed in terms of gallons of root beer, what is the highest price at which pizza can be traded that would make both roommates better off? What is the lowest price? Why?arrow_forwardConstruct a Production Possibilities Curve in Excel based on the following Production possibilities Schedule: Missiles Milk (millions of gallons) 0 4010 34 20 2730 1940 1050 0 What is the "shape" or the "slope" of the frontier or curve? Calculate the opportunity cost of producing the "first" batch of 10 missiles. Calculate the opportunity cost of producing the "last" batch of 10 missiles. What would it mean if the economy was operating at the frontier? What would happen to the frontier if the production technology improves?arrow_forwardSuppose you are a farmer with 20 hectares of land on which you could grow either wheat or barley. You can allocate however much land you want to each crop. a. Draw a Production Possibilities Frontier depicting this situation. b. Explain what a Production Possibilities Frontier is and what the diagram represents, including what points on, below and above the PPF represent. c. Explain why the PPF that you have drawn has the shape that it does. d. Is it possible to use just the PPF to find the best allocation for the crops? Explain.arrow_forward
- Carmen and Dennis live on a desolate island. They spend their days fishing or climbing trees to collect coconuts. The following table shows how much of each activity Carmen and Dennis can produce for each hour of work. They each can work up to 12 hours a day. Fish per hour Coconuts per hour Carmen 40 8 Dennis 28 7 On a piece of paper, draw Carmen's PPF with fish on the horizontal (x) axis and coconuts on the vertical (y) axis. Carment's PPF extends from Question Blank 1 of 9 to Question Blank 2 of 9. (Hint: your answer should be in the form of a point (x,y).) Question Blank 3 of 9 has an absolute advantage in the production of fish, and Question Blank 4 of 9 has an absolute advantage in the production of coconuts. Carmen's opportunity cost of producing 1 coconut is Question Blank 5 of 9 fish, while Dennis' opportunity cost of producing 1 coconut is Question Blank 6 of 9 fish. Because Carmen has a Question Blank 7 of 9 opportunity cost of producing…arrow_forwardSuppose that Ned can produce either potato chips or computer chips. If he only produces potato chips he can produce 25 in a day. If he only produces computer chips, he can produce 50 in a day. Drag the endpoints of the line to plot his production possibilities frontier (PPF) on the graph. Potato Chips 50 45 40 35 30 25 20 15 10 5 0 0 5 10 15 20 25 30 Computer Chips 35 Ned's PPF 40 45 50 What is the opportunity cost of potato chip production in terms of computer chips/potato chip? 2 4/3 3/4 0 0 0 0 50 1/2 25arrow_forwardExplain why a movement from a point inside a production possibilities frontier to the production possibilities frontier can be described as a free lunch and a movement along a production possibilities frontier is described as a tradeoff.arrow_forward
- 个 The table shows Frigidia's production possibilities. Fish (pounds per month) 300 200 100 0 Draw the four points defined in the table. Use the four-point line tool to draw the PPF. Label it. and and and and Skis (pairs per month) 0 50 100 150 If Frigidia produces 200 pounds of fish per month, how many pairs of skis must it produce to achieve production efficiency? Frigidia must produce pairs of skis to achieve production efficiency. What is Frigidia's opportunity cost of producing 1 pound of fish and 1 pair of skis? pairs of The opportunity cost of 1 pound of fish is skis 300- 250 200- Fish (pounds per month) 150- 100- 50- 25 50 75 100 125 Skis (pairs per month) 150 17!arrow_forwardKenji and Lucia are farmers. Each one owns a 12-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. Kenji Lucia 120 On the following graph, use the blue line (circle symbol) to plot Kenji's production possibilities curve (PPF), and use the purple line (diamond symbol) to plot Lucia's PPF. 106 90 72 සිය 40 30 24 12 0 Corn (Bushels per acre) 12 15 0 Rye (Bushels per acre) 3 5 00 120 180 240 300 350 420 480 540 600 CORN (Bushels) -o Kenji's PPF Lucia's PPF (?) has an absolute advantage in the production of corn, and has an absolute advantage in the production of rye. bushels of corn, whereas Lucia's opportunity cost of producing 1 bushel of rye is opportunity cost of producing rye than Lucia, has a comparative advantage in the has a comparative advantage in the production of corn. Kenji's…arrow_forwardDeborah and Janet are roommates. They spend most of their time studying (of course), but they leave some time for their favorite activities: making pizza and brewing root beer. Deborah takes 3 hours to brew a gallon of root beer and 2 hours to make a pizza. Janet takes 7 hours to brew a gallon of root beer and 5 hours to make a pizza. Deborah's opportunity cost of brewing a gallon of root beer is , and Janet's opportunity cost of brewing a gallon of root beer is . has an absolute advantage in brewing root beer, and has a comparative advantage in brewing root beer. If Deborah and Janet trade foods with each other, will trade away pizza in exchange for root beer. The price of pizza can be expressed in terms of gallons of root beer. The highest price at which pizza can be traded that would make both roommates better off is of root beer, and the lowest price that makes both roommates better off is of root beer per pizza.arrow_forward
- The following table shows the amount of good A and good B that two countries could produce if they devoted all their resources to that good. Assume both countries have the same quantity of resources and the trade-off between good A and good B remains constant as resources are shifted from one good to another. Answer the questions below and show calculations where appropriate. Canada India Good A 600 500 Good B 950 1200 Draw a straight-line PPF graph for Canada. Draw a straight-line PPF graph for India. Which country has the comparative advantage in good A? In good B? Explain. What is India’s marginal opportunity cost of producing good A? Good B? Based on the data given, what is the terms of trade range for good A in terms of units of good B?arrow_forwardBoth Geppetto and Lewis are toy store owners. They decide that they would like to trade puzzles and puppets in order to better stock their toy store shelves. The table below compares their production possibilities schedules. Production Possibilities Schedules Geppetto Lewis Puzzles Puppets Puzzles Puppets 80 0 30 0 64 4 24 4 48 8 18 8 32 12 12 12 16 16 6 16 0 20 0 20 Instructions: Enter your answers as a whole number. a. Geppetto and Lewis agree to trade at a rate of 3 puzzles for each puppet. With those terms of trade, who is most likely to be the supplier of puzzles? Who is most likely to be the supplier of puppets? Puzzles: Geppetto Puppets: Lewis b. The two toy store owners agree to specialize and to trade 30 puzzles for 10 puppets. The terms of trade are still 3 puzzles for each puppet. How many puzzles and puppets will each one have after they complete their trade? Lewis: puzzles and puppets Geppetto: puzzles and puppets Geppetto Lewis Puzzles Puppets Puzzles Puppets 80 64 48 32…arrow_forwardDebra can make either 12 cakes or 16 cookies in 4 hours. Sam can make either 6 cakes or 12 cookies in 4 hours. a. Who has an absolute advantage at producing cakes and who has an absolute advantage at producing cookies? Briefly explain your answers. b. State Debra’s and Sam’s opportunity costs of producing one cake and one cookie. Draw and place your answer in a table which looks something like this: Cake Cookie Debra Sam c. If both Debra and Sam concentrate on producing only the product in which they have a comparative advantage, how many cakes and how many cookies will they produce?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
