Production Possibilities Frontier (Ch. 2) Computers D B PPF₁ PPF₂ Bread (1) Economic growth in this economy is illustrated by: a. a movement from point A to point B b. a movement from point A to point C c. a shift along PPF, from point B to point C d. an outward shift from PPF, to PPF₂ C
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- QUESTION 10 product Y 28 24 20 16 12 8 4 0 0 Production Possibilities Frontier PPFO 4 8 PPFn 12 16 Point E 20 24 product X 10. Assuming the PPF is shifting from PPFO to PPFn, which of the following explains the cause or causes of the economic growth depicted in this Figure? a) This Figure represents growth due to an increase in resources and/or improvement in technology that are specific to the production of X. b) This Figure represents growth due to an increase in resources and/or improvement in technology that are specific to the production of Y. This Figure represents growth due to an increase in resources and/or improvement in technology that are not specific to either product. d) This Figure represents growth due to an increase in specialization.CAPITAL GOODS Use the diagram below to answer the questions that follow. M. CONSUMER GOODS (a) What change could cause the PPF to shift from the original curve (HJ) to the new curve (MN)? (b) Under what conditions might an economy be operating at point Z? (c) Why might a government implement a policy to mnove the economy from Point V to Point W? Question 3 F7 PrtSc Insert 88 F10 F11 6 F12 & 9- 7.Assume that Nigeria's economy is represented by a PPF diagram with, agriculture on the X-axis and education on the Y-axis. From the article, mobile wireless internet is expected to...a) a) Move the Nigerian economy towards its production possibilities frontierb) b) Move Nigeria's PPF outwards c) c) Swivel the PPF towards the X-axisd) d) Swivel the PPF towards the Y-axis
- 9. Draw a PPF curve for the macroeconomy of Germany (a large producer of capital goods). Assume that Germany has an unemployment rate of 7%. (Hint: draw the dashed line assuming a full employment level of 4.5% unemployment rate and consider only consumption and capital goods in the economy.)c. Suppose a small country produces only food and clothing. An earthquake destroys many of the clothing factories, but the ability to produce food is unaffected. Use the 3-point-curve drawing tool to draw a new production possibilities boundary on the graph on the right, labeled c, reflecting the change in the clothing factories. Properly label this line. Place end points one on horizontal and one on vertical axes. Carefully follow the instructions above, and only draw the required objects. Tonnes of Clothing Per Year PPBO Tonnes of Food Per YearTools 4. Shifts in production possibilities Suppose the fictional country of Yosemite produces two types of goods: agricultural and capital. The following diagram shows its current production possibilities frontier for rice, an agricultural good, and axles, a capital good. Drag the production possibilities frontier (PPF) on the graph to show the effects of a time-saving innovation in the manufacturing of axles. Note: Select either end of the curve on the graph to make the endpoints appear. Then drag one or both endpoints to the desired position. Points will snap into position, so if you try to move a point and it snaps back to its original position, just drag it a little farther. AXLES (Thousands) 420 350 280 210 140 70 0 PPF 80 120 160 RICE (Millions of bushels) 200 240 PPF
- Consider the following production possibilities curve (PPC) for an economy that produces two goods- cotton and bananas, both measured in tonnes produced per year. (0, 1500) A (100, 1440) B Tonnes of Cotton 1500 1000 500 0 100 100 tonnes of cotton 360 tonnes of cotton 300 tonnes of cotton. (200, 1280) 920 tonnes of cotton. 200 Tonnes of Bananas (300, 920) 300 Suppose the economy is currently producing at Point C. What is the opportunity cost of increasing production of bananas to 300 tonnes at Point D? E (360, 500) F (400,0) 400Some Canvas discussion work Consider the previous Amland's PPF, with equation S = 30 -0.25 C and graph shown on the right. Now, say Amland experienced proportional economic growth. So, it has a new PPF and a new PPF equation, because it is now able to produce (with its given resources/technology) 1.2 times the quantity of each good it produced before. 1. Write the Amland's new PPF equation. 2. Determine the unit cost of each good in Amland. 3. Draw the new PPF graph in the diagram. Steel 30 0 Old PPF equation: S=30-(1/4) C Old unit cost of C: 1/4 units of S New PPF equation: New unit cost of C: 120 CornIn the following table, select the amount of each good that each country exports and imports in the boxes across the row marked "Trade Action," and enter each country's final consumption of each good on the line marked "Consumption." Is When the two countries did not specialize, the total production of corn was 36 million bushels per week, and the total production of jeans was 104 million pairs per week. Because of specialization, the total production of corn has increased by million bushels per week, and the total production of jeans has increased by million pairs per week. Because the two countries produce more corn and more jeans under specialization, each country is able to gain from trade. Calculate the gains from trade-that is, the amount by which each country has increased its consumption of each good relative to the first row of the table. In the following table, enter this difference in the boxes across the last row (marked "Increase in Consumption").
- Question 3 The U.S. economy's Production Possibilities Frontier is made up of two goods: oranges and automobiles. The U.S. economy moves from point A, where it produces 100 oranges and 200 cars, to point B, where it produces 200 oranges and 150 cars. It follows that Point A is an inefficient point. Point B may be an inefficient point There is not enough information to answer the question Point B is an inefficient point Question 5 Which of the following statements are false? 1. If scarcity did not exist, then neither would the Production Possibilities Frontier. II. All Production Possibilities Frontiers are bowed out from the origin. III. All Production Possibilities Frontiers are made up of two goods or services. IV. Opportunity cost can not be illustrated with the Production Possibility Frontier. OL True statement. III. IV II and IV Question 16 Which of the following will have no impact on the demand for Yogurtland frozen yogurt in San Diego? A change in the price of frozen yogurt…Line XX is the production possibility curve (PPC) of a worker picking peas and beans in a 10 hour working day. (The graph for this question is attached below) What would cause the worker's PPC to shift to the line YY? A. a machine that increases the worker's pea picking productivity only B. a new work schedule where the worker spends 6 hours per day picking peas and only 4 hours picking beans C. a reduction in working hours to 8 per day and a machine that increases the worker's pea picking productivity D a reduction in working hours to 8 per day onlyA certain production possibilities frontier shows production possibilities for two goods: pants and shirts. Which of the following concepts can not be illustrated in this model? Question 39Select one: a. the opportunity cost of shirts in terms of pants b. the effect of economic growth on production possibilities involving pants and shirts c. the flow of dollars between (i) sellers of pants and shirts and (ii) buyers of pants and shirts d. the tradeoff between production of pants and production of shirts
