Microeconomics: Principles & Policy
14th Edition
ISBN: 9781337794992
Author: William J. Baumol, Alan S. Blinder, John L. Solow
Publisher: Cengage Learning
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Question
Chapter 3, Problem 3TY
To determine
The case that leads to more generous production possibilities frontier for the country.
Expert Solution & Answer
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The accompanying hypothetical production possibilities tables are for New Zealand and Spain. Each country can produce apples and
plums.
New Zealand's Production Possibilities Table
(Millions of Bushels)
Production Alternatives.
Product
A
B
с
D
Apples
0
20
40
60
Plums
15
10
5
0
Spain's Production Possibilities Table
(Millions of Bushels)
Production Alternatives
Product
R
S
T
U
Apples
0
20
40
60
Plums
60
40
20
0
a. Plot the production possibilities data for each of the two countries separately. Show the trading possibilities lines for each nation if
the actual terms of trade are 1 plum for 2 apples.
Instructions: (1) Use the tools provided, 'PPC NZ' and 'PPC SP, (plot 4 points each) to draw the PPC curves. (2) Use the
tool provided, 'TOT, in each diagram (plot 4 points each) to draw the trading possibilities lines for each nation. To earn full credit, you
must correctly plot all points for each line.
New Zealand
Spain
80
Tools
140
/
120
TOT
60
100
40
20
10 15 20 25
30
Plums (millions of…
What does a point inside the production possibilities frontier (PPF) represent?
A. An efficient allocation of resources
B. An underutilization of resources
C. A technologically advanced production point
D. An unattainable production level given current resources
Farm-A and Farm-B grow the following amounts of potatoes and cabbage in their farms:
Farm-A takes one week to produce 101 units of potatoes and 207 units of cabbages
Farm-B takes one week to produce 127 units of potatoes and 169 units of cabbages
a) What is the opportunity cost of Farm-A to produce 20 units of cabbages
b) What is the opportunity cost of Farm-B to produce 12 units of potatoes
PLEASE SOLVE ALL PARTS AS THERE ARE ONLY 2 SUB-PARTS TO THIS QUESTION. THANKS.
Chapter 3 Solutions
Microeconomics: Principles & Policy
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- If countries X and Y produce only either baseballs or golf balls, their maximum outputs are shown in the accompanying production possibilities schedules. Country X Baseballs 150 50 Golf balls 75 200 Y In country X the opportunity cost of 1 golf ball is Multiple Choice 75 baseballs 2 baseballs. 150 baseballs 05 baseballsarrow_forwardThe accompanying hypothetical production possibilities tables are for New Zealand and Spain. Each country can produce apples and plums. New Zealand's Production Possibilities Table Spain's Production Possibilities Table (Millions of Bushels) (Millions of Bushels) Production Alternatives Production Alternatives Product A в D Product R T U Apples 20 40 I 60 Apples 40 20 60 Plums 15 10 5 Plums 60 40 20 a. Plot the production possibilities data for each of the two countries separately. Show the trading possibilities lines for each nation if the actual terms of trade are 1 plum for 2 apples. Instructions: (1) Use the tools provided, 'PPC NZ' and 'PPC SP, (plot 4 points each) to draw the PPC curves. (2) Use the tool provided, 'ToT,' in each diagram (plot 4 points each) to draw the trading possibilities lines for each nation. To earn full credit, you must correctly plot all points for each line. New Zealand Spain 80 Tools 140 Tools 120 PPC NZ PPC SP ToT Тот 60 100 80 40 60 40 20 20 50 (50, 0)…arrow_forwardExplain the following economics concepts with PPF. a)scarcity b)Economic inefficiency c)Economic growtharrow_forward
- Ice cream (millions of gallons per year) 4. 3. 24 2. 4. 6. Milk (millions of gallons per year) The figure above shows the production possibilities frontier for a country A combination of 4 million gallons of milk and 4 million gallons of ice cream is attainable and production efficient. unattainable and production efficient, ) unattainable attainable and production inefficient. More information is needed to determnine if the point is attainable or not.arrow_forwardThe accompanying hypothetical production possibilities tables are for New Zealand and Spain. Each country can produce apples and plums. New Zealand's Production Possibilities Table (Millions of Bushels) Spain's Production Possibilities Table (Millions of Bushels) Production Alternatives Production Alternatives Product A B D Product R T Apples 20 40 60 Apples 20 40 60 Plums 15 10 5 Plums 60 40 20 a. Plot the production possibilities data for each of the two countries separately. Show the trading possibilities lines for each nation if the actual terms of trade are 1 plum for 2 apples. Instructions: (1) Use the tools provided, 'PPC NZ' and 'PPC SP' (plot 4 points each) to draw the PPC curves. (2) Use the tool provided, 'ToT,' in each diagram (plot 4 points each) to draw the trading possibilities lines for each nation. To earn full credit, you must correctly plot all points for each line. New Zealand Customize and control Google Chrome Spain 80 Tools 140 Tools 120 60 PPC NZ Тот PPC sP ToT…arrow_forwardDraw another diagram putting on it the original production possibility frontier you drew for (a), labelling it AA. (i) Draw a new production possibility frontier on the diagram, labelling it PP, which shows the position after a devastating war has hit the economy. (ii) Draw another PPF labelling it QQ which shows an increase in productivity in the econory such that output from the same amount of resources increases by 50 per cent in the public sector but twice that amount in the private sector. already finished part A need help with part B thanks!arrow_forward
- The table provides data on how long it takes Maia and Juanita to mow the lawn and weed the flower beds. Table: Maia and Juanita Maia Juanita Hours it takes to: Mow the lawn 3 4 Weed the flower beds 1 2 Who has a comparative advantage in weeding the flower beds? Maia because she can weed the beds more quickly. Juanita because she takes the time to weed the beds carefully. Maia because she has a lower opportunity cost. Juanita because she has a lower opportunity cost.arrow_forwardFarm-A and Farm-B grow the following amounts of potatoes and cabbage in their famrs: Farm-A takes one week to produce 101 units of potatoes and 207 units of cabbages Farm-B takes one week to produce 127 units of potatoes and 169 units of cabbages a) What is the opportunity cost of Farm-A to produce 20 units if cabbages Give your answer in 2 decimal places b) What is the opportunity cost of Farm-B to produce 12 units of potatoes Give your answer in 2 decimal placesarrow_forwardThe following graph is the production possibilities curve of a nation. 10 B 8+ eBook 7 6 1 + 1 3 4 Bread Which of the following combinations would be unattainable? Multiple Choice 4 dril presses and 1 bread 7 drill presses and 1 bread 9 drill presses and 2 bread Drill Pressesarrow_forward
- Explain how each of the following situations would affect a nation's production possibility curve. (i) A technological innovation allows the nation to more efficiently convert solar energy into electricity. a) What happens to the PPF? b) Explain (ii) COVID-19 increases the number of unemployed workersin the nation. a) What happens to the PPF? b) Explain (iii) A global pandemic results in 6 million confirmed cases and the death of over 400,000 individuals. a) What happens to the PPF? b) EXplain (iv) A switch to online delivery, increases access to education in the nation's colledges and universities, but might have a detrimental impact on the quality of education. a) What happens to the PPF? b) Explain v) The nation passes a law requiring all employers to give the employees 16 weeks of paid vacation each year. Prior to this law employer were not legally required to give employees any paid vacation time. a) What happens to the PPF? b) Explainarrow_forwardFood 0 Alpha Shelter Beta In the figure are two linear production possibilities curves for countries Alpha and Beta. We can conclude thatarrow_forward
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