Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 2, Problem 3WNG
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Draw a PPF that represents the production possibilities for goods X and Y if there are constant opportunity costs. Next, represent an advance in technology that makes it possible to produce more of X but not more of Y. Finally, represent an advance in technology that makes it possible to produce more of Y but not more of X.
Draw a PPF for butter and guns production.a. Explain verbally and graphically the concept of “free lunch.”
b. Explain verbally and graphically what movement between two production points on the PPF represents.Does this qualify as “a free lunch?” Why or why not?
Suppose Martha and Julia both work at a bakery making bread and muffins. In an hour, Martha can either make 10 loaves of bread or 40 muffins, while Julia can either make 12 loaves of bread or 60 muffins. Both Martha and Julia work 8 hours a day.
Draw Martha's daily PPC.
Draw Julia's daily PPC.
What is the opportunity cost to each of making one loaf of bread?
What is the opportunity cost to each of making one muffin?
Who has the comparative advantage in making bread? Why?
Who has the absolute advantage in making bread? Why?
Suppose you are the owner of the bakery. If Julia and Martha are currently both spending all of their time making muffins, then which of them should you ask to start making bread?
Draw the combined daily PPC of Martha and Julia.
Suppose you are the owner of the bakery. If you want 500 muffins to be made in a day, then how are you going to assign the work between Martha and Julia?
Chapter 2 Solutions
Macroeconomics
Ch. 2.1 - Prob. 1STCh. 2.1 - Prob. 2STCh. 2.1 - Prob. 3STCh. 2.1 - Prob. 4STCh. 2 - Prob. 1QPCh. 2 - Prob. 2QPCh. 2 - Prob. 3QPCh. 2 - Prob. 4QPCh. 2 - Prob. 5QPCh. 2 - Prob. 6QP
Ch. 2 - Prob. 7QPCh. 2 - Prob. 8QPCh. 2 - Prob. 9QPCh. 2 - Prob. 10QPCh. 2 - Prob. 11QPCh. 2 - Prob. 12QPCh. 2 - Prob. 13QPCh. 2 - Prob. 1WNGCh. 2 - Prob. 2WNGCh. 2 - Prob. 3WNGCh. 2 - Prob. 4WNGCh. 2 - Prob. 5WNGCh. 2 - Prob. 6WNGCh. 2 - Prob. 7WNGCh. 2 - Prob. 8WNGCh. 2 - Prob. 9WNGCh. 2 - Prob. 10WNGCh. 2 - Prob. 11WNGCh. 2 - Prob. 12WNG
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- The figure below depicts the production possibilities curve (PPC) of a country. It also depicts the consumption possibilities curve (CPC) when the country is engaged in trade with one other country. Point C is this country's consumption when that trade occurs. Quantity of 350 good y 300 250 200 150 100 50 0 0 20 40 19 C 60 80 100 120 Quantity of good x Calculate how much this country trades with the other country in good y when the two countries engage in free trade. Enter a whole number only. Enter a positive number if this country exports good y, and a negative number if it imports it. Enter O if the answer cannot be obtained with the information given. Since this is a graphical question, approximate answers (within 20 of the exact answer) are accepted. Hint: consider how much the country produces and consumes this good.arrow_forwardSuppose that in the country of England, two goods can be produced on available agricultural land: wine and wool. Suppose that the opportunity costs of production are constant, so that the PPF is a straight line. Further, when all resources are devoted to wine production, England can produce 200 (thousand) barrels. When all resources are devoted to wool production, England can produce 400 (thousand) bushels of wool.What are the opportunity costs in England of producing a bushel of wool?arrow_forwarda. Using data in the table, graph the ppf (with carpet on the vertical axis) b. What happens to the opportunity cost of carpets measured in number of looms as carpet production increases from 0 to 10 Million yards, from 10 to 22 Million yards, from 20 to 30 Million yards, and so on? c. If this country chooses to produce both carpets and looms, what will happen to the ppf over time? Why?arrow_forward
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