Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 3, Problem 6IAPA
To determine
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A production possibility frontier
corn. The farmer can grow 80 bushels of soybeans or 160 bushels of
corn on each acre of land. The price of soybeans is $13.20 per bushel.
The price of corn is $5.85 per bushel.
A farmer can grow soybeans or
What is the opportunity cost (in dollars) per acre to grow
soybeans? Corn?
Which crop (pick only one) do you think the farmer will produce?
Why?
Question 1
What does the Production Possibilities Frontier of a firm show and how does it relate to scarcity and
budgeting? Draw the Production Possibilities Frontier for a firm producing two goods, and explain
what the various positions in the diagram mean.
Final Year Exam: Economics
3 of 24
The definition of Product Possibility Frontier is
The graph which indicates the various production possibilities of two products when resources are fixed.
The graph that shows the highest amount of money a person can make over a period of time.
The graph that shows how supply and demand works.
The graph that tells us how well an economy is doing
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Foundations of Economics (8th Edition)
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- Based on the figure attached, please answer below questions What this figure represents. Explain. How does the above curve illustrate the tradeoff we must make to increase food productionarrow_forwardWhat do you mean by the production possibilities of an economyarrow_forwardFor the question below use the following figures which illustrate the production possibilities available to a farmer and a rancher with 12 hours of labour. For the farmer, the opportunity cost of 1 pound of potatoes is Select one: a. 4 pounds of meat b. 1 pound of meat c. 2 pounds of meat d. 0.5 pound of meatarrow_forward
- In 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_forwardA dairy farmer decides to use automatic milking machines instead of milking by hand. Which economic question is answered by his decision? Select one: ○ a. How to produce? b. For whom to produce? ○ c. Should milk be produced? ○ d. What to produce?arrow_forwardRefer to the figure at right. If the farmer has 50 acres of land, the farmer is producing at point a, and an acre of land yields 400 bushels of beans or 800 bushels of wheat, how much land is devoted to the production of wheat? Part 2 A. 15 acres B. 12.5 acres C. 8.5 acres D. 10 acresarrow_forward
- If a producer is producing at point z and wants to move to point X, then what is the trade-off? How do you find trade-off? 20 gallons of milk 3 lbs of cheese 7 lbs of cheese 10 gallons of milkarrow_forwardThe following is a table that shows the production possibilities for Good X and Good Y. Type of Production Possibilities Goods A B. D. E X 2 4 6. 8. Y 30 27 21 12 a. Show these data graphically on a piece of graph paper. b. What is the cost of producing 2 units of good X? c. What is the cost of producing 6 units of good X? d. What is the cost of increasing the production of good X from 4 to 8 units? e. What is the cost of moving from combination D to A? f. Label a point F inside the PPC. What is point F imply? g. Label a point G outside the PPC. What is point G imply? h. Label a point H on the PPC. What does point H imply? i. What does it mean when the combination moves from B to E along the same PPC? j. What is the this of PPC. Explain. 45arrow_forwardLesson 2 Assignment Product Combo A Combo B Combo C Combo D Combo E Motorcycles 0 2 4 6 8 Surfboards 30 27 21 12 0 Graph the above production data, putting motorcycles on the horizontal axis. What are the opportunity costs of moving from point B to point D and from point D to point A? Point F represents 3 motorcycles and 21 surfboards. Plot this point on your graph and explain what it represents. Point G represents 5 motorcycles and 24 surfboards. Plot this point on your graph and explain what it represents.arrow_forward
- 1. Discuss the idea of an opportunity cost and think of three opportunity costs that you have made today 2. What is marginal benefit? How is it measured?arrow_forwardUse 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_forwardWhat other steps could be taken to make people more knowledgeable about the journey that food takes from farm to table?arrow_forward
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