Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 2, Problem 4QCMC
To determine
Change in preference and production possibility frontier .
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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.
An economy produces hot dogs and hamburgers. If a discovery of the remarkable health benefits of hot dogs were to change consumers’ preferences, it would a expand the production possibilities frontier b contract the production possibilities frontier c move the economy along the production possibilities frontier d move the economy inside the production possibilities frontie
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…
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Principles of Economics, 7th Edition (MindTap Course List)
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- 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.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_forwardA 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_forward
- What is Production Possibility Frontier? 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 cow population?arrow_forwardIn Mark Skousen’s article, “What is Economics, Anyway?,” he bemoans the apparent fact that the modern definition of economics is incomplete. What does he say is missing? A. relationship between means and endsB. the concept of scarcityC. the process of transformation of resourcesD. allocation toward competing endsarrow_forward
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