1. Production Possibilities Country X is faced with the following output combinations for capital goods and consumer goods. Option A b. ABCDE с Capital Goods 0 8000 16000 24000 32000 Consumer Goods 220000 200000 160000 100000 0 Complete parts a, b, c, and d. a. Graph the production possibilities curve for Country X with capital goods on the x-axis and consumer goods on the y-axis. the Law of Increasing Opportunity Costs hold for this example? Explain why or why not. c. As you move from point B to point C, what is the cost of one more consumer good?

1. Production Possibilities Country X is faced with the following output combinations for capital goods and consumer goods. Option A b. ABCDE с Capital Goods 0 8000 16000 24000 32000 Consumer Goods 220000 200000 160000 100000 0 Complete parts a, b, c, and d. a. Graph the production possibilities curve for Country X with capital goods on the x-axis and consumer goods on the y-axis. the Law of Increasing Opportunity Costs hold for this example? Explain why or why not. c. As you move from point B to point C, what is the cost of one more consumer good?

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter2: Economic Tools And Economic Systems

Section: Chapter Questions

Problem 3.5P

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scenario Production Advantage and Opportunity CostsAssume there are two countries, the United States and France, and two goods, automobiles andcomputers.The table presented below shows the number of automobiles and computers that the United States andFrance can produce with the same amount of resources.United States FranceAutomobiles 120 100Computers 60 55Source: Pearson Education Inc. 1.1 Which country has an absolute advantage in computer production? Motivate your answer.1.2 Which country has a comparative advantage in the production of automobiles? Motivateyour answer. 1.3 Assume these countries trade with one another under the conditions of free trade. Whichcountry will specialise in the production of automobiles? Motivate your answer. 1.4 If free trade exists between the United States and France, what are the highest and lowestlevels for the price of an automobile (expressed in terms of computers)? Motivate youranswer by stating which level favours the United States and France.
1. The countries France and Italy produce Perfumes and Leather Coats using only labor as an input. AvailableLabor for France and Italy is 3000 and 1000 respectively. Unit of labor per Leather Coat in France is 6 units and inItaly are 2 units. France needs 2 units of labors to produce 1 bottle of Perfume and Italy needs 4 unit of labor. a) Draw the Production Possibility Curve by using relevant information. b) Which country has the comparative advantage in producing Perfume?
Draw the production possibilities frontier on a scale diagram, with the production of X on the horizontal axis and the production of Y on the vertical axis Annual Production of Y Annual Production of X 0 20 45 60 70 75 1300 1200 900 6:00 350 0 b. If the economy is producing 45 units of X and 900 units of Y, what is the opportunity cost of producing an extra 15 units of X. Show on graph. C. If the economy is producing 20 units of X and 800 units of Y, what is the opportunity cost of producing an extra 10 units of X. Show on graph.
Countries A and B currently consume 400 units of food and 400 units of textiles each and currently do not trade with one another. The citizens of country A have to give up one unit of food to gain two units of textiles, while the citizens of country B have to give up one unit of textiles to gain two uni food. Their production possibilities curves are shown. textiles 1200 Cauntry A Slopedf 2 line 600 400 Country B Slopeof line To200 400 600 Under the theory of comparative advantage: O a. The citizens of country A should make textiles and trade with the citizens of country B for food. Ob. There are no gains from trade in this example. O. The citizens of country A should make food and trade with the citizens of country B for textiles. O d. A is twice as good as B at making food and B is twice as good as A at making textiles.
Assume an economy that produces two goods experiences technological improvements in the production of one of its categories of goods. Using the ONE correct diagram aattached, discuss in terms of the production possibility frontier the economic impact of the technological improvement for this economy. Include in your answer the meaning of the production possibility frontier.
Production Advantage and Opportunity CostsAssume there are two countries, the United States and France, and two goods, automobiles andcomputers.The table presented below shows the number of automobiles and computers that the United States andFrance can produce with the same amount of resources.United States FranceAutomobiles 120 100Computers 60 55Source: Pearson Education Inc. 1.1 Which country has an absolute advantage in computer production? Motivate your answer.1.2 Which country has a comparative advantage in the production of automobiles? Motivateyour answer. 1.3 Assume these countries trade with one another under the conditions of free trade. Whichcountry will specialise in the production of automobiles? Motivate your answer. 1.4 If free trade exists between the United States and France, what are the highest and lowestlevels for the price of an automobile (expressed in terms of computers)? Motivate youranswer by stating which level favours the United States and France.
Refer to the production possibility frontiers for two friends Frodo and Sam who can both produce Ice creams and Jelly beans. Frodo's maximum production of Ice creams is 500 with no Jelly beans, or 2,000 Jelly beans with no Ice creams. Sam's maximum production of Ice creams is 600 with no Jelly beans, or 1,200 Jelly beans with no Ice creams. ICE CREAMS ICE CREAMS 600 500 1200 JELLY BEANS 2000 JELLY BEANS Frodo' PPF Sam's PPF Answer briefly these TWO questions in the box space provided below. Part A: Assuming efficient production without trade, derive the maximum amount of Jelly beans that can be produced by Sam along with 300 Ice creams. Describe your steps in detail. Part B: Assume that Frodo and Sam agree to specialize in production and trade between themselves. Frodo offers 1,000 Jelly beans to Sam in exchange for 300 lce creams. Would Sam agree to this trade?
A worker in country A can produce either 5 computers or 45 tons of rice, while a worker in country B canproduce either 7 computers or 42 tons of rice. a. Graph the production possibilities curve for each country. On which point of the curve would eachcountry produce if the workers spent half of their time producing each good? b. Which country has absolute advantage? Which country has comparative advantage? In theproduction of rise Country A absolute advantage c. If there was trade, which country would specialize in the production of rice? d. At what price of computers would the countries agree to trade?
The nation of Rougarou is able to produce turnips and potatoes in combinations represented by the data in the following table. Each number represents thousands of bushels. Turnips Potatoes OD. Only Unattainable OE. Only Efficient OF. Only Attainable OG. Attainable and Efficient OH. Only Inefficient A 100 0 B 90 10 C 70 20 D 40 30 E 0 40 A production point that contained 70,000 bushels of Turnips and 30,000 bushels of Potatoes would be classified as: OA. Unattainable and Efficient OB. Attainable and Inefficient OC. Unattainable and Inefficient
An economy produces two goods ,X and Y .lt uses two means of production, labour and capital. A unit of labour can produce either 1unit of X or 4units of Y (or linear combination of the two).A unit of capital can produce either 4units of X or 1unit of Y (or linear combination of the two)there are 100units of each means of production. (i) Draw the production possibility frontier of the economy when the two goods can only be produced by a mixture of both factors. (ii)What will be the opportunity cost of X if the economy produces 50units of X ? (iii) Given that the production technology is linear ,will the opportunity cost of X remain unchanged when we produce 90units of X ? (iv)Briefly explain the difference between the PPC with a constant opportunity cost and the PPC with an increasing opportunity cost as more output of one good is produced. Use a well labeled diagram to explain your answer?
The following table and production possibilities frontier provide information about the production possibilities of Apple, a manufacturer of electronics. Use it to answer questions 15-19. Point iPhone iPod Touch A --- 100 200 300 400 500 420 400 360 300 iPhone 600 200 0 5000 400 300 200 100 0 Apple's Production Possibilities 100 O B A 200 300 400 500 600 iPod Touch
6.On a production possibilities frontier, produ ction is efficient if the production point is Gaseballs 200 150 MENL202 ABDAL AYMENL20211 B 100 ABDAL ANA DALLAH AENL20211 AYMENL20211 50 GANA ABDALLAH AYMENL20211 GANA ABDALLAH 100 200 ALLAH Figure 2-6 300 400 Bananas ALLAH AYMENL20211 CANA AYMENL20211 ABDALLAH GANA AYMENL20211 GANA ABDALLAH AYMENL20211 ABDALLAH AYMENL20211 A inside the frontier. on or inside the frontier. C outside the frontier. D on the frontier. ANA DALLAH GANA RDALLAH GANA BDALLAH GANA RDALLAH GANA ADALLAH