Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Question
Chapter 8, Problem 5P
(a)
To determine
The PPC graph for person A.
(b)
To determine
The slope of the curve.
(c)
To determine
The
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Q.20 What will be the shape of PPC when marginal opportunity cost is increasing?
(a) Concave to the origin
(c) Upward sloping
(b) Convex to the origin
(d) both (a) and (c)
(b)
Hogwarts School of Witchcraft and Wizardry is divided into four Houses: Gryffindor, Huf-
flepuff, Ravenclaw, and Slytherin. The following table shows how many books or snakes each
house is able to produce every day:
Gryffindor
2
1. What are the opportunity costs of one snake for each house?
2. Draw the joint PPF of Hogwarts on the graph below. it is fine if your graph is not to
scale, but you must clearly label all kinks' coordinates and all intercept.
Hufflepuff Ravenclaw Slytherin
5
2
5
Books
Snakes
Demonstrate the law of increasing costs with a PPF. Show and explain how it works.
Chapter 8 Solutions
Microeconomics (2nd Edition) (Pearson Series in Economics)
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- Carmen and Dennis live on a desolate island. They spend their days fishing or climbing trees to collect coconuts. The following table shows how much of each activity Carmen and Dennis can produce for each hour of work. They each can work up to 12 hours a day. Fish per hour Coconuts per hour Carmen 40 8 Dennis 28 7 On a piece of paper, draw Carmen's PPF with fish on the horizontal (x) axis and coconuts on the vertical (y) axis. Carment's PPF extends from Question Blank 1 of 9 to Question Blank 2 of 9. (Hint: your answer should be in the form of a point (x,y).) Question Blank 3 of 9 has an absolute advantage in the production of fish, and Question Blank 4 of 9 has an absolute advantage in the production of coconuts. Carmen's opportunity cost of producing 1 coconut is Question Blank 5 of 9 fish, while Dennis' opportunity cost of producing 1 coconut is Question Blank 6 of 9 fish. Because Carmen has a Question Blank 7 of 9 opportunity cost of producing…arrow_forwardSuppose you are a farmer with 20 hectares of land on which you could grow either wheat or barley. You can allocate however much land you want to each crop. Draw a Production Possibilities Frontier depicting this situation. Explain what a Production Possibilities Frontier is and what the diagram represents, including what points on, below and above the PPF represent. Explain why the PPF that you have drawn has the shape that it does. Is it possible to use just the PPF to find the best allocation for the crops? Explain.arrow_forward个 The table shows Frigidia's production possibilities. Fish (pounds per month) 300 200 100 0 Draw the four points defined in the table. Use the four-point line tool to draw the PPF. Label it. and and and and Skis (pairs per month) 0 50 100 150 If Frigidia produces 200 pounds of fish per month, how many pairs of skis must it produce to achieve production efficiency? Frigidia must produce pairs of skis to achieve production efficiency. What is Frigidia's opportunity cost of producing 1 pound of fish and 1 pair of skis? pairs of The opportunity cost of 1 pound of fish is skis 300- 250 200- Fish (pounds per month) 150- 100- 50- 25 50 75 100 125 Skis (pairs per month) 150 17!arrow_forward
- Crows, and other birds, are eating your wheat, but not your barley. If you set up animatronic scarecrows you will increase your wheat yield to 3 wheat per acre, but not change your barley yield. The scarecrows need space to move around in, so if you set them up you will lose 5 acres. If you are allowed to set up scarecrows, which best describes the shape of your PPF? a. A single straight line, since adding scarecrows doesn’t change the fact that each acre is just as good at producing wheat or barley as any other acre. b. A concave (outward bending) smooth curve. c. A concave (outward bending) curve made up of two straight lines with different slopes that meet at a kink. d. A convex (inward bending) curve made up of two straight lines with different slopes that meet at a kink.arrow_forwardive asked this before but can I have another example please A production possibilities curve (PPC) shows that a country can make a combination of two goods with its resources. Answer the following questions:A PPC illustrates the concept of opportunity costs. Choose any two goods. Draw a PPC showing the country producing at a point using all of its resources productively. Label this Point A. Label Point B on your diagram, showing a point where there would be unused resources. Would the country choose to produce at Point B? Explain.Label Point C on your diagram, showing a point where this country does not have enough resources to produce this combination of goods. What would have to happen for this country to be able to produce at Point C?arrow_forwardWhat is PPP, and why is it useful?arrow_forward
- What does efficiency mean according to the PPF model?arrow_forwardA new drug is invented that increases both the marginal benefit of investing in health (at all levels of health) and the maximum attainable health. a) Draw what happens to the PPF before and after the new drug invention. b) How does the drug affect optimal H*? c) How does the drug affect time spent at the gym?arrow_forwardplease use drop down shown to provide answer to what happens to ppf and explanationarrow_forward
- Graphically show William's production possibilities frontier. Debate should be on the vertical axis. Label four points on the graph: (A) a point inside the PPF; (B) a point on the PPF where debate is more valued than studying; (C) a point on the PPF where studying is more valued than debate; (D) a point outside the PPF. Explain the effects of an economy at point A Explain the effects of an economy at point B Explain the effects of an economy at point C Explain the effects of an economy at point at point D (assume that nothing in our economy changes) Does our PPF experience the law of increasing opportunity cost? How do we know? Under what conditions can we have a linear PPF rather than a "bowed-out" PPF? Sketch a PPF that experiences increasing opportunity cost and a PPF that experiences constant opportunity cost.arrow_forwardThink about your own life. Maybe you are willing to spend 50 or 60 hours a week between school and work. Maybe you take care of young children and have a lot of home life responsibilities and you only spend 20 hours between school and work. Draw your own personal Production Possibilities Frontier (PPF) for time spent doing school and work. Remember to plot out multiple possible combinations and then draw a line to connect them. Explain where you operate on your PPF and why. What are some of the opportunity costs you have to weigh to determine where you will operate along your personal PPF curve?arrow_forwardWhat does a PPF show? What is a trade-off?arrow_forward
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