Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 3, Problem 2MCQ
To determine
(a)
Best Statement
To determine
(b)
Best Statement
To determine
(c)
Best Statement
To determine
(d)
Best Statement.
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You have exams in economics and chemistry coming up and five hours available for studying. The following table shows the trade-offs you face in allocating the time you will spend in studying each subject.
Hours Spent Studying
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Economics
Chemistry
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Chemistry
A
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B
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C
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2
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D
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E
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F
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a. Use the data in the table to draw a production possibilities frontier graph. Label the vertical axis “Score on economics exam” and label the horizontal axis “Score on chemistry exam”. Make sure to label the values where your production possibilities frontier intersects the vertical and horizontal axes.
b. Label the points representing choice C and choice D. If you are at choice C, what is your opportunity cost of increasing your chemistry score?
c. Under what circumstances would A…
1
Gary and Brenda both have similar businesses in the garment industry making caps and backpacks. In one day, Gary can make 60 caps and 12 backpacks when he divides his production resources equally between the two products. In one day, Brenda can produce 80 caps and 20 backpacks. Answer the following questions and show all calculations to support your answers.
a. Who has the comparative advantage in producing backpacks? Explain with calculations.b. What is Brenda's opportunity cost of making a cap compared to Gary's? Explain with calculations.c. Based on your calculations in a) and b) above, who should specialize in making what if they intend to trade? Explain with calculations.d. If Gary and Brenda decide to specialize in what they do best, what would be the new production per day for each of them? Explain with calculations.e. If Gary and Brenda decide to trade, what would be the terms of trade for a backpack and how does each benefit from trading? Explain with calculations.
Marlaria can be controlled
The world health organization malaria chief says that it is too costly to try to fully eradicate the disease. He says that by using nets, medicine, and DDT it is possible to eliminate 90% of malaria cases. But to eliminate 100% of cases would be extremely costly.
4. Make a graph of the production possibilities frontier with malaria cases on the X-axis and other goods and services on the Y- Axis.
( compatible with Microsoft word would be ideal )
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Chapter 3 Solutions
Foundations of Economics (8th Edition)
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