Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 3, Problem 7IAPA
To determine
Impact on
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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 beans
The 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.
45
The following table shows the production possibilities data.
Farmer
Rancher
Table 2-3
Labor Hours Needed to Make
1 Pound of:
Meat
8
4
Potatoes
2
5
Pounds produced in 40
hours:
Meat
5
10
Potatoes
20
8
Refer to Table 2-3. The farmer and the rancher both could benefit if the farmer were to specialize in
a. meat and the rancher were to specialize in potatoes.
O b. potatoes and the rancher were to specialize in meat.
c. neither good and the rancher were to specialize in both goods.
O d. neither good; they cannot both benefit by specialization and trade.
Chapter 3 Solutions
Foundations of Economics (8th Edition)
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