1. Below is the production possibilities table for consumer goods (washing machine) and capital goods (tractor): Type of Production Production Possibilities A B C D E Washing Machine 0 4 8 12 16 Tractor 60 54 42 24 0 a) Show these data graphically. b) If the economy is at point B, what is the cost of one more washing machine? What is the cost of one more tractor? c)Explain how the production possibilities frontier reflects the law of increasing opportunity costs.

1. Below is the production possibilities table for consumer goods (washing machine) and capital goods (tractor): Type of Production Production Possibilities A B C D E Washing Machine 0 4 8 12 16 Tractor 60 54 42 24 0 a) Show these data graphically. b) If the economy is at point B, what is the cost of one more washing machine? What is the cost of one more tractor? c)Explain how the production possibilities frontier reflects the law of increasing opportunity costs.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter2: Thinking Like An Economist

Section: Chapter Questions

Problem 4CQQ

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Explain why societies cannot make a choice above their production possibilities frontier and should not make a choice below it.
Figure 1 The production possibility frontier ABCDE is a production possibility frontier. It shows the different combinations of goods which can be produced if all resources are fully and efficiently utilised. The economy can produce at any point on the line. It cannot produce at G because the PPF shows the maximum that can be produced. It can produce within the PPF,05 such as at F, but less will be produced than the maximum possible. Non-manufactured goods 50 40 30 20 10 0 A 10 B Ti C 20 30 Manufactured goods G D E 40
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ple Choice ý the letter of the choice that best completes the statement or answers the question. 1. Which of the following is an example of lower production costs brought about by the use of technology? the delivery costs of gasoline to the consumer by diesel trucks the use of e-mail to replace slower surface mail а. b. the making of breads and pastries in local shops rather than large bakeries the importing of fresh vegetables from South America rather than using canned vegetables- с. d. 2. What is the effect of import restrictions on prices? They cause prices to drop. b. a. They cause prices to rise. They often cause prices to rise steeply and then drop. d. They usually do not have any lasting effect on price. с. 3. What do sellers do if they expect the price of goods they have for sale to increase dramatically in the future? sell the goods now and try to invest the money instead of resupplying sell the goods now but try to get the higher price for them store the goods until the…
Problem 1: Production Possibilities Frontier Consider an economy that produces bicycles and autos. The production possibilities schedule shown below denotes the points on the production possibilities frontier. Points Amount Bicycles Amount Autos A 10 B 8 D E 5 8 12 14 15 a) Draw the production possibilities frontier in a clearly labelled graph. You can assume the points on the frontier are connected by straight lines. Please put bicycles on the x-axis and autos on the y-axis. b) Is point E more efficient in production than point C? Explain. c) Based on this production possibility frontier, can the economy currently produce 8 bicycles and 10 autos? If not, explain what would need to happen to allow the economy to produce 8 bicycles and 10 autos. d) True/False/Uncertain (and explain): Point B more efficient in allocation than point A. e) Does this production frontier have increasing opportunity costs? Explain, and also explain why it is common for production frontiers to have increasing…
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Com 120.000 80,000 40.000 B C A B the opportunity cost of that shift is 40,000 units of corn. 5.000 10.000 15.000 In the above graph, if the economy is currently producing at point C and then shifts production to point B, then A the economy moved from one efficient point to another efficient point. Robots moved from an inefficient point to an efficient point.
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