Macroeconomics
11th Edition
ISBN: 9781260506891
Author: Colander
Publisher: MCG
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Chapter 2, Problem 5IP
To determine
Impact on
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The production possibilities frontier (PPF) is a simplified economic model that illustrates the different combinations of two products that an economy can produce given the resources it has available. Assume the country of Turkey can produce only apples or oranges and answer each of the following questions
A if a flood destroyed 20% of the farmland used to grow apples and oranges, which direction will Turkey's PPF shift /your answer should be "outwards" or "inwards") and why?
B. Turkey decides to begin increasing, the production of oranges. Explain the implications of this using the term "opportunity cost"
C An advancement in organic pesticide has allowed for less fruit to be damaged by pests. Explain how this change would alter the PPF.
Introduction to the Production Possibilities Curve (PPC)
As you know, the basic economic problem is scarcity. Since we do not have enough scarce resources to satisfy
everyone's needs and wants, we all have to make choices. We must choose how to spend our time, our energy, our
money, and our material possessions, and for every choice that is made, a cost is suffered.
The relationship between choice and cost can be shown in a graph called a production possibilities curve, or PPC. For
example, consider a student who has 4 hours of free time in the evening. He or she can choose to spend some, all, or
none of those 4 hours studying for a test the following day. He or she could also use the time to catch up on sleep.
These choices can be graphed:
Choice A - spend all 4 hours studying
Choice B- spend 2 hours studying, and 2 hours getting extra sleep
Choice C- spend all 4 hours sleeping
Of course, other combinations of the 4 hours exist.
The student could study for 3.5 hours, and get an extra…
When Paul Samuelson switched from physics to economics, Robert Solow is said to have remarked that the average IQ in
both disciplines went up. A bystander responded that Solow's claim must be wrong because it implies that the average IQ
for academia as a whole (which is a weighted average of the average IQ levels for each discipline) must also have gone
up as a result of the switch, which is clearly impossible.
Was the bystander right?
A) Yes. If the average in both disciplines goes up then the population average must also rise.
B) No. There is not enough information about the average IQ for the population.
C) Yes. The weights may change so that the population average also increases.
D) No. If those in physics had IQs above average and those in economics has IQs below average, then the population
average need not have changed.
Chapter 2 Solutions
Macroeconomics
Ch. 2.1 - Prob. 1QCh. 2.1 - Prob. 2QCh. 2.1 - Prob. 3QCh. 2.1 - Prob. 4QCh. 2.1 - Prob. 5QCh. 2.1 - Prob. 6QCh. 2.1 - Prob. 7QCh. 2.1 - Prob. 8QCh. 2.1 - Prob. 9QCh. 2.1 - Prob. 10Q
Ch. 2.A - Prob. 1QECh. 2.A - Prob. 2QECh. 2.A - Prob. 3QECh. 2.A - Prob. 4QECh. 2.A - Prob. 5QECh. 2.A - Prob. 6QECh. 2.A - Prob. 7QECh. 2.A - Prob. 8QECh. 2 - Prob. 1QECh. 2 - Prob. 2QECh. 2 - Prob. 3QECh. 2 - Prob. 4QECh. 2 - Prob. 5QECh. 2 - Prob. 6QECh. 2 - Prob. 7QECh. 2 - Prob. 8QECh. 2 - Prob. 9QECh. 2 - Prob. 10QECh. 2 - Prob. 11QECh. 2 - Prob. 12QECh. 2 - Prob. 1QAPCh. 2 - Prob. 2QAPCh. 2 - Prob. 3QAPCh. 2 - Prob. 4QAPCh. 2 - Prob. 5QAPCh. 2 - Prob. 1IPCh. 2 - Prob. 2IPCh. 2 - Prob. 3IPCh. 2 - Prob. 4IPCh. 2 - Prob. 5IPCh. 2 - Prob. 6IP
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