Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Question
Chapter 3, Problem 2SPPA
To determine
Attainable and efficient level of output at 50 units of entertainment and 50 units of good food.
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2) Ben and Jerry make two types of ice cream: Chubby Hubby and Chunky
Monkey. For each hour that Ben and Jerry work, they can make either 6 quarts of
Chubby Hubby or 3 quarts of Chunky Monkey. Ben and Jerry work 8 hours each
day.
a. If they only make Chunky Monkey, how much can they produce?
b.
If they only make Chubby Hubby, how much can they produce?
c. What is the situation if they produce 12 Chunky Monkeys and 16 Chubby
Hubbys?
d.
What would happen if someone asked for 18 Chunky Monkey and 18
Chubby Hubby?
The table provides information about the production possibilities of a firm that produces bed linens.
Quilts
(per hour)
Possibility
A
B
C
Pillows
(per hour)
0
8
and
and
and
16
12
0
Draw points that show the three possibilities defined by the table. Label them A. B. and C.
Draw the firm's PPF by connecting the points. Label it.
Along this PPF, the quantities of
A. all goods other than pillows and quilts are increasing
OB. all goods other than pillows and quilts remain constant
OC. pillows and quilts are either increasing or decreasing, so there is no scarcity
OD. all goods other than pillows and quilts are decreasing
Tom and Abby produce rackets and balls. The tables
show their production possibilities.
Tom allocates all his resources and produces 2 rackets
and 16 balls an hour. Abby allocates all her resources
and produces 2 rackets and 4 balls an hour.
Tom and Abby decide to specialize and trade.
specializes in rackets and produces
specializes in balls and produces
A. Tom; 2 rackets; Abby; 32 balls
B. Tom; 4 rackets; Abby; 8 balls
C. Abby; 4 rackets; Tom; 32 balls
D. Abby; 2 rackets; Tom; 8 balls
E. Tom; 4 rackets; Tom; 32 balls
The number of balls produced
by
If Tom and Abby specialize and trade 1 racket for 8
balls.
gets rackets from
for less than it
costs
gets balls
from
to produce
them.
to produce them, and
for less than it costs
Tom's Production Possibilities
Rackets
(per hour)
0
1
2
3
4
Abby's Production Possibilities
Rackets
(per hour)
0123
and
and
and
and
and
4
and
and
and
and
and
Balls
(per hour)
32
24
16
8
0
Balls
(per hour)
8
006 NO
4
2
0
Chapter 3 Solutions
Foundations of Economics (8th Edition)
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- Use the following table to answer the question below. Jake's Production Possibilities Schedule Jane's Production Possibilities Schedule Pounds of Green Pounds of Corn Pounds of Green Pounds of Corn Beans Beans 160 80 10 120 20 60 40 20 80 40 30 40 60 20 40 80 Jake should specialize in the production of which good? neither both corn O green beansarrow_forward8. A small bakery makes baguettes and muffins. With the resources available (workers, flour, machines) this bakery can produce either 1500 baguettes or 2000 muffins per day. a. What is the opportunity cost of an extra muffin in terms of baguettes? b. Assume that production is currently 1200 muffins and 600 baguettes. If the bakery wanted to expand its muffin production to 1300 muffins per day, how many baguettes would be baked?arrow_forwardIn the attached figure, if 2 million computers are produced per year, then:a. The marginal cost of one computer exceeds the marginal benefit of one computer, so more computers must be produced.b. The marginal cost of a computer exceeds the marginal benefit of a computer, so fewer computers must be produced.c. The marginal benefit of a computer exceeds the marginal cost of a computer, so more computers must be produced.d. The marginal benefit of a computer exceeds the marginal benefit of a computer, so fewer computers must be produced.FOR EACH ALTERNATIVE, PLEASE EXPLAIN WHY IS TRUE, FALSE OR UNCERTAIN.arrow_forward
- -A) Describe production and the factors that go into producing various goods and services. -B) Describe the opportunity cost an economy incurs to increase the production of one product. Use a production possibilities frontierarrow_forwardBarbara and Antoni each work 8 hours a day producing lemonade and pizza. In eight hours, Antoni can produce 400 pints of lemonade or 200 pizzas. In the same amount of time, Barbara can produce 450 pints of lemonade or 300 pizzas. Currently, Antoni decides to produce 200 pints of lemonade and 100 pizzas, and Barbara decides to produce 180 units of each good. Draw the production possibilities frontiers for Barbara and Antoni, with pizza on the x-axis. Include current production points. In your own words, explain absolute advantage. Who has absolute advantage in lemonade production? In pizza production? In your own words, explain comparative advantage. Define opportunity cost and provide an example of an opportunity cost you face in your own life. Find Barbara's and Antoni's opportunity cost of producing pizza in terms of lemonade. Who has a comparative advantage? , Find Barbara's and Antoni's opportunity cost of producing lemonade in terms of pizza. Who has a comparative advantage? For…arrow_forwardTable 1 Minnie Hats Umbrellas Mickey 50 40 10 5 Table 1 shows the output per week of two people, Minnie and Mickey. They can either devote their time to making hats or making umbrellas. 1) Refer to Table 1. Which of the following statements is true? A) Mickey has an absolute advantage in making both products. B) Minnie has an absolute advantage in making both products. C) Minnie has an absolute advantage in making hats and Mickey in making umbrellas. D) Minnie has an absolute advantage in making umbrellas and Mickey in making hats. 2) Refer to Table 1. What is Minnie's opportunity cost of making a hat? A) 1/5 of an umbrella B) 1/4 of an umbrella C) 4 umbrellas D) 10 umbrellas 3) Refer to Table 1. What is Mickey's opportunity cost of making a hat? A) 1/10 of an umbrella B) 1/5 of an umbrella C) 5 umbrellas D) 10 umbrellas 4) Refer to Table 1. Which of the following statements is true? A) Minnie has a comparative advantage in making both products. B) Mickey has a comparative advantage in…arrow_forward
- 5. China is able to produce turnips and potatoes in combinations represented by the following table. (Each number represents 1,000s of bushes.) Potatoes Production Turnips point a. B C D E b. C. points. 100 and 0 90 and 10 and 20 and 30 and 40 70 40 0 Plot the data on a production possibilities graph, labeling Can China produce a combination of 30 turnips and 24 potatoes? Draw this production point on the graph (label it F) and verbally explain. Demonstrate that China experiences increasing opportunity costs by calculating the opportunity cost of producing another potato at each production point. Explain.arrow_forwardFigure 1 shows the PPF for an economy that produces Food and Clothes. What is the maximum amount of food that the economy can produce if it produces 48 clothes? A) 50 Food B) 320 Food C) 440 Food D) 500 Foodarrow_forward
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