Microeconomics (Book Only)
12th Edition
ISBN: 9781285738307
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 2, Problem 8QP
To determine
Explain what relationship implies about the cost.
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a) Why is the PPF curve bowed outward. Is it due to increasing opportunity cost or decreasing opportunity cost or constant opportunity cost
Type and answer using only one of the underlined words above
b) What happens to the PPF curve during a recession? Will it shift inward or outward or remains constant
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c) Suppose a technology is banned due to its adverse environmental impacts. Would the production possibilty curve shift inward or outward or remain
constant due to this
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d) How will a policy encouraging more immigration would shift the production possibility forntier. It will shift inward or outward or remain constant
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Use the data in the following graph to illustrate the law of increasing costs numerically. (Hint: Start at point E and move toward point A.)
A
180
C
D
150
120
90
60
30
30
60
90
120
150
180
Units of digital cameras
Moving from point E toward point A, we give up (Click to select) v
players.
amounts of digital cameras for each gain of (Click to select) V
DVD
The opportunity cost of moving from:
E to D is (Click to select) v
digital cameras;
D to C, (Click to select) V digital cameras;
C to B, (Click to select) V digital cameras;
and B to A, (Click to select) digital cameras.
Units of DVD players
Use the diagram below uploaded to answer the questions that follow.
(a) What change could cause the PPF to shift from the original curve (HJ) to the new curve (MN)?
(b) Under what conditions might an economy be operating at point Z?
(c) Why might a government implement a policy to move the economy from Point V to Point W?
Chapter 2 Solutions
Microeconomics (Book Only)
Ch. 2.1 - Prob. 1STCh. 2.1 - Prob. 2STCh. 2.1 - Prob. 3STCh. 2.1 - Prob. 4STCh. 2 - Prob. 1VQPCh. 2 - Prob. 2VQPCh. 2 - Prob. 3VQPCh. 2 - Prob. 4VQPCh. 2 - Prob. 5VQPCh. 2 - Prob. 1QP
Ch. 2 - Prob. 2QPCh. 2 - Prob. 3QPCh. 2 - Prob. 4QPCh. 2 - Prob. 5QPCh. 2 - Prob. 6QPCh. 2 - Prob. 7QPCh. 2 - Prob. 8QPCh. 2 - Prob. 9QPCh. 2 - Prob. 10QPCh. 2 - Prob. 11QPCh. 2 - Prob. 12QPCh. 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. 9WNG
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- ( a) why is the slop of PPF downward? (b) why does the PPF look concave to the origin? (c) What is positive economic analysis?arrow_forwardAssume the economy can produce either sports utility vehicles (SUVS) or minivans. The graph below depicts the current production possibilities frontier (PPF). Suppose several new factories are built. Move the end points of the PPF below to show how the PPF changes. Assume that the factory construction affects the economy's ability to produce both minivans and SUVs. Quantity of minivans Quantity of SUVs PPF This is an example of: economic stagnation. economic recession economic contraction. economic growth.arrow_forwardQuestion 2 A NEED HELP PLEASEarrow_forward
- As an economy grows, A) its PPF shifts outward. B) the opportunity cost of production will approach 0. its PPF does not shift; instead, the production point moves from inside the PPF to be closer to the PPF. D) it can eliminate scarcity. E) the opportunity cost of production will increase.arrow_forwardIf an unattainable point outside a production possibilities curve can become an attainable and even an efficient point, can an inefficient point become an efficient point in the production possibilities curve model? Explain with a graph.arrow_forwardSuppose the fictional country of Katmai produces two types of goods: agricultural and capital. The following diagram shows its current production possibilities frontier for millet, an agricultural good, and microprocessors, a capital good. Drag the production possibilities frontier (PPF) on the graph to show the effects of a breakout of avian flu that sickens millions of workers. Note: Select either end of the curve on the graph to make the endpoints appear. Then drag one or both endpoints to the desired position. Points will snap into position, so if you try to move a point and it snaps back to its original position, just drag it a little farther. MICROPROCESSORS (Thousands) 180 150 120 90 60 30 30 o 70 770 140 PPF 210 280 350 420 MILLET (Millions of bushels) PPFarrow_forward
- Consider Economia, a nation that produces only clothes and food. On their straight-line PPF, food is measured on the horizontal axis and clothes are measured on the vertical axis. If Economia produces no food, it can produce 1200 units of clothing; if it produces no clothing, it can produce 4800 units of food. Calculate the slope of the nation's PPF. Economia would like to produce one more unit of food. To do so, it must sacrifice how many units of clothing?arrow_forwardIs this an example of opportunity cost? “To begin, I began selling prints of my pictures in 2019 throughout 2020. It's now closed. USPS and UPS were the options I had during this period to ship out orders. Because UPS was more expensive at the moment, I chose to mail my prints via USPS rather than UPS. My orders were delivered on time and without damage by the United States Postal Service. The opportunity cost is the cost of UPS.”arrow_forwardUse the figure below to answer the following questions. What is the opportunity cost of increasing investment from 6 units to 8 units? Production Possibilities 10 10 CONSUMER GOODS (units per time) INVESTMENT GOODS (units per time)arrow_forward
- Solve it on paper!arrow_forwardDraw a marker diagram showing how the equilibrium point changes if the production technology improves all else equalarrow_forwardShifts in production possibilities Suppose South Africa produces two types of goods: agricultural and capital. The following diagram shows its current production possibilities frontier for barley, an agricultural good, and locomotives, a capital good. Drag the production possibilities frontier (PPF) on the graph to show the effects of a breakout of avian flu that sickens millions of workers. Note: Select either end of the curve on the graph to make the endpoints appear. Then drag one or both endpoints to the desired position. Points will snap into position, so if you try to move a point and it snaps back to its original position, just drag it a little farther.arrow_forward
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