Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
20th Edition
ISBN: 9780078021756
Author: McConnell, Campbell R.; Brue, Stanley L.; Flynn Dr., Sean Masaki
Publisher: McGraw-Hill Education
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Chapter 2, Problem 8DQ
To determine
Creative destruction and it relevance.
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Suppose, under license from Apple, a factory in China buys all the components for an iPhone from multiple manufacturers for $150 They assemble the iPhone and
sell it to Apple for $350. Apple then sells the phone to customers for $699.
How much value does Apple add during their step in the production process?
Ⓒ$1.50
1200
O $349
O $350
C 04:50
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23.7KB/s O L A 9ll (51)
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= Chegg
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The opportunity cost of production is zero
O outside (to the right of) the production possibilities frontier.
O inside the production possibilities frontier.
O when all resources are used to produce only one of the two goods.
O on the production possibilities frontier.
fiproduction possibilities frontier has a 'bowed outward' shape only when:
O As the quantity of one good produced increases, the opportunity cost of
producing that good also increases.
O an economy is self-sufficient instead of interdependent and engaged in trade.
the more resources the economy uses to produce one good, the fewer resources
it has available to produce the other good.
O the rate of tradeoff between the two goods being produced is constant.
2
Suppose there is a public good, this good would add 50 dollars in benefit to each of the 1000 people living in the city. At what costs would they
agree to build it?
O 75000
O 40000
O 25000
O both 40000 and 25000
Chapter 2 Solutions
Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
Ch. 2.2 - Prob. 1QQCh. 2.2 - Prob. 2QQCh. 2.2 - Prob. 3QQCh. 2.2 - Prob. 4QQCh. 2 - Prob. 1DQCh. 2 - Prob. 2DQCh. 2 - Prob. 3DQCh. 2 - Prob. 4DQCh. 2 - Prob. 5DQCh. 2 - Prob. 6DQ
Ch. 2 - Prob. 7DQCh. 2 - Prob. 8DQCh. 2 - Prob. 9DQCh. 2 - Prob. 10DQCh. 2 - Prob. 11DQCh. 2 - Prob. 12DQCh. 2 - Prob. 13DQCh. 2 - Prob. 1RQCh. 2 - Prob. 2RQCh. 2 - Prob. 3RQCh. 2 - Prob. 4RQCh. 2 - Prob. 5RQCh. 2 - Prob. 6RQCh. 2 - Prob. 7RQCh. 2 - Prob. 8RQCh. 2 - Prob. 1PCh. 2 - Prob. 2PCh. 2 - Prob. 3PCh. 2 - Prob. 4P
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- With current technology, suppose a firm is producing 400 loaves of banana bread daily. Also assume that the least-cost combination of resources in producing those loaves is 5 units of labor, 7 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at prices of $40, $60, $60, and $20, respectively. If the firm can sell these 400 loaves at $2 per unit, what is its total revenue? Its total cost? Its profit or loss? Will it continue to produce banana bread? If this firm’s situation is typical for the other makers of banana bread, will resources flow toward or away from this bakery good?arrow_forwardQUESTION 6 product Y O 28 24 20 16 12 8 0 b) 4/5 c) 5/4 O d) -4/5 O 4 none of the above Production Possibilities Frontier point A 8 -point F 12 product X point B -point C 16 20 -point E 06. What is the per-unit opportunity cost of product Y as production moves from point D to point A? O a) -5/4 point D 24arrow_forwardThe graph below shows production possibilities frontiers for Cornelius and David, two priests that aid the Mondoshawan race. David is Cornelius' apprentice, and they each spend their time either deciphering old prophecies or developing plans to save the world (which comes in handy later). Use this information to answer the following 3 questions. Plans 10 9 8 7 6 LO 5 4 3 2 1 8° Cornelius David 0 1 2 3 4 5 c. Both (a) and (b). d. Neither (a) nor (b). 6 7 8 b. 10 translations and 4 plans. C. 5 translations and 11 plans. d. 9 translations and 9 plans. 9 Translations 10 1. (Cornelius and David) Which of the following statements is true? a. Cornelius' opportunity cost of one translation is ½ of a plan. b. Cornelius' opportunity cost of one translation is less than David's opportunity cost of one translation. 2. (Cornelius and David) If David and Cornelius engage in trade, which of the following points is both feasible and efficient in production? a. 18 translations and 14 plans.arrow_forward
- With current technology, suppose a fifirm is producing 400 loaves of banana bread daily. Also assume that the least-cost combination of resources in producing those loaves is 5 units of labor, 7 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at prices of $40, $60, $60, and $20, respectively. If the fifirm can sell these 400 loaves at $2 per unit, will it continue to produce banana bread? If this fifirm’s situation is typical for the other makers of banana bread, will resources flow to or away from this bakery good?arrow_forwardVarious cultures have come up with their own methods to limit catch size and prevent fishery collapse. In old Hawaii, certain fishing grounds near shore could be used only by certain individuals. And among lobstermen in Maine, strict territorial rights are handed out so that only certain people can harvest lobsters in certain waters. Discuss specifically how these systems provide incentives for conservation. Then think about the enforcement of these property rights. Do you think similar systems could be successfully enforced for deep-sea fishing, far off shore?arrow_forwardAssume that your company produces two goods: laptops and tablets. Assume aslo that your company has limited resources( including time) to devote to producing these items. Now assume that the laptop team does something to improve the efficiency of making laptops, while the tabley holds to old methods. Given the change you can a) only increase your production of laptops b) only increase your production of tablets c) increase production of both items d) not increase your production in either tablets or laptops.arrow_forward
- Caroline is an artist. She purchases canvas, paints, brushes, and accessories for $100. She sells one of her original paintings to an art gallery for $2,000, even though an art lover will pay the gallery $5,000 for that painting. How much value does the art gallery add? O $5,000 O $1,900 O $4,900 O $100 O $3,000arrow_forwardThe figure below shows the market for large bags of potato chips. Market for Potato Chips in large bag units Price ($) 7 LO LO 5 3 2 1 0 10 20 30 40 50 60 70 80 90 100110120 S Darrow_forwardThe diagram below shows the marginal costs of pollution abatement for two firms, Firm 1 and Firm 2. Dollars 60 50 40 30 20 10 0 Firm 1 FIGURE 17-5 MC₁ li lz ls ls ls lo l Abatement Dollars 60 50 40 30 20 10 0 Firm 2 MC₂ li z ls ls ls Q6 Q7 Abatement Refer to Figure 17-5. Suppose Firm 1 and Firm 2 are each abating Q3 units of pollution. If the government imposed an emissions tax of $40 per unit of emissions, OA) each firm would abate to the same level. B) Firm 2 would increase abatement beyond Q3 and Firm 1 would abate less than Q3. C) each firm would abate to Q3. D) the level of pollution would be optimal. E) Firm 1 would increase abatement beyond Q3 and Firm 2 would abate less than Q3.arrow_forward
- With current technology, suppose a firm is producing 400 loaves of banana bread daily. Also, assume that the least-cost combination of resources in producing those loaves is 5 units of labor, 7 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at prices of $40, $60, $60, and $20, respectively. If the firm can sell these 400 loaves at $2 per unit, will it continue to produce banana bread? If this firm’s situation is typical for the other makers of banana bread, will resources flow to or away from this bakery good?arrow_forwardBased on the table below, what is the optimal Level of Activity? Total benefit Total cost Level of Activity of activity of activity 0 0 0 1 10 2 17 3 24 4 31 5 38 6 45 346223 12 20 3 O O O O O 5 6 07arrow_forwardneed help 10 Pancakes 90 8 7 6- 5 4 3 2 1- 0- 0 1 2 3 4 5 6 Eggs When is the opportunity cost of one pancake the highest? O 0 pancakes O 2 pancakes O 4 pancakes O 6 pancakes O 8 pancakes O 9 pancakes 7 8 9 10arrow_forward
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