Essentials of Economics (MindTap Course List)
7th Edition
ISBN: 9781285165950
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 2, Problem 4QCMC
To determine
Change in preference and
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Draw 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.
Drawing a production possibilities frontier (PPF)
Instructions:
Consider an economy than only produces two goods - Blueberries and Batteries.
Step 1: Draw a production possibilities frontier (PPF) for this economy. Label blueberries on the vertical axis and batteries on the horizontal axis. Label one point that is "efficient", one point that is "inefficient", and one point that is "unattainable".
Step 2. Draw another PPF of the economy with the axes labeled. Grab another color pen/pencil/highlighter and show how the PPF would change if there was a technological change that increased the production of batteries only. (Hint: The intercept for blueberries will not change.) Clearly label the new PPF.
Step 3. Draw another PPF of the economy with the axes labeled. Grab another color pen/pencil/highlighter and show how the PPF would change if there was a drought that destroyed some of the blueberry harvest. (Hint: The intercept for batteries will not change.) Clearly label the new…
Consider an economy than only produces two goods - Blueberries and Batteries.
Step 1: Draw a production possibilities frontier (PPF) for this economy. Label blueberries on the vertical axis and batteries on the horizontal axis. Label one
point that is "efficient", one point that is "inefficient", and one point that is "unattainable".
Step 2. Draw another PPF of the economy with the axes labeled. Grab another color pen/pencil/highlighter and show how the PPF would change if there was
a technological change that increased the production of batteries only. (Hint: The intercept for blueberries will not change.) Clearly label the new PPF.
Step 3. Draw another PPF of the economy with the axes labeled. Grab another color pen/pencil/highlighter and show how the PPF would change if there was
a drought that destroyed some of the blueberry harvest. (Hint: The intercept for batteries will not change.) Clearly label the new PPF.
Step 4: Draw another PPF of the economy with the axes labeled. Grab…
Chapter 2 Solutions
Essentials of Economics (MindTap Course List)
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- Which of the following is the most accurate statement about production possibilities? Question 10Answer a. An economy can produce at any point inside the production possibilities frontier, but not on or outside the frontier. b. An economy can produce at any point on or inside the production possibilities frontier, but not outside the frontier c. An economy can produce at any point inside or outside a production possibilities frontier. d. An economy can produce only on the production possibilities frontier.arrow_forwardD). 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.arrow_forwarda. Draw 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? b. Use a production possibilities frontier to describe the idea of “efficiency.”arrow_forward
- A production possibilities curve: a. Eliminates the need to make choices regarding the use of resouces b. Can be drawn for an economy but not for an individual c. Shows the different combinations of goods that can be produced d. Shows the different combinations of inputs that can be used to produce a goodarrow_forward1. It is primarily the basis of economic activity a. economics b. scarcity c. social science d. abundance 2. What happen to the demand for tilapia if the price of bangus will go down? a. prices of tilapia remains b. price of bangus remains c. shift to the right d. shift to the left If cruz family lessens their demand expenditures for rice because they want pandesal for their breakfast, this is a. time efficient b. taste and preference c. decrease in income d. saving for cooking gasarrow_forwardmultiple choicearrow_forward
- What is the market for bananas an example of? Select one: a. Micro economics b. Positivist Economics c. Normative Economics O d. Macro economicsarrow_forwardAssume that the table below describes the production possibilities confronting an economy. Using that information: a. Draw the production-possibilities curve. Be sure to label each alternative output combination (A through E). (Note: put # of convenience stores on the horizontal line) b. Calculate the opportunity cost of building the first convenience store. c. Calculate the opportunity cost of building the second convenience store. d. Why can’t more of both outputs be produced? Potential Output Combinations Convenience Stores Homeless Shelters A 0 10B 1 9C 2 7 D 3 4E…arrow_forwardThe fundamental reason to study economics is to study ____. how choices are made how production is determined how countries trade with each other how finances are determinedarrow_forward
- Which of the following is true of an economy’s production possibilities curve? a. It shows the combinations of any two resources that can be used to produce an efficient level of output. b. It shows the alternative combinations of goods that can be produced by fully employing scarce resources. c. It must be a straight line when all resources are fully employed. d. It is bowed in (convex to the origin) because of changing levels of technology. e. It is bowed out (concave to the origin) when marginal opportunity costs are constant.arrow_forwardProduction is efficient if the economy is producing at a point a. on the production possibilities frontier. b. outside the production possibilities frontier. c. on or inside the production possibilities frontier. d. inside the production possibilities frontier.arrow_forwardDraw and explain a production possibilities frontier for an economy that produces milk and cookies. Use a production possibilities frontier to describe the idea of “efficiency.”arrow_forward
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