ich of the following would be true in a typical PPF curve? The resources needed to make both goods are exactly the same and are needed in the same proportions The opportunity cost of every additional unit produced of the good in the x-axis would be increasing. The inverse of its slope would represent the opportunity cost of producing one more unit of the good in xis. ts slope would represent the opportunity cost of producing one more unit of the good in the x-axis.
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- In this assignment, you will demonstrate your ability to draw a simple production possibilities curve given data on the quantity of one input (labor) available and the amount of labor required to produce each of two outputs (guns and butter). You should also be able to identify the opportunity cost of one good in terms of the other as the slope of the PPC. You will explain your analysis of the figures to explain why it’s not possible to produce combinations of the two goods outside the PPC. Suppose a nation has a total of 12 units of labor, which can be used to produce either guns or butter. One gun takes 6 units of labor to produce and 1 butter takes 2 units of labor to produce. 1. Explain why scarcity exists in this economy. Use the data as evidence of your reasoning. 2. What is the maximum quantity of guns that can be produced? 3. What is the maximum quantity of butter than can be produced? 4. Draw the nation’s production possibility curve. 5. What is the opportunity cost of guns in…Alice and Bob are both capable of producing goods X and Y. In one hour, Alice can produce one unit of each good. In the same amount of time, Bob can produce two units of each good. If Alice and Bob have access to the same amount of time, calculate the difference between the slope of Alice's PPF and the slope of Bob's PPF. (round to two decimal places if necessary)Acme supply is analyzing a Production Possibilities Curve that compares the production of wrenches( x-axis) to the production of pliers (Y-axis). If the slope of the PPC is 2, the opportunity cost of producing pliers in terms of wrenches is
- The production possibilities frontier (PPF) for Honduras and Brazil, representing hypothetical levels of production, are shown in the graphs. Assume that, without trade, each country is initially producing and consuming at point A on its PPF curve. Suppose these countries decide to trade. Each country will specialize in the production of the good for which it has a comparative advantage. Assume the countries agree to trade. The terms of trade are 6000 tons of bananas for 4000 tons of steel. Move the post‑trade consumption point for each country to reflect their post‑trade consumption. Which good will each country produce? Honduras will produce bananas and Brazil will produce steel. Brazil will produce both bananas and steel. Honduras will produce both bananas and steel. Honduras will produce steel and Brazil will produce bananas.1. 2. 3. Suppose that the community of Markstown produces two goods: Michelob light beer (MLB) and bacon/lettuce/tomato sandwiches (BLTs). Assuming increasing opportunity costs, draw a production possibilities curve (PPC) for Markstown (be sure to label both axes correctly). On your graph of the PPC from #1, find and label the following: an inefficient point (label it X) an efficient point (label this one Y) an unattainable point (label it Z) a. b. C. Due to an increase in immigration across its borders, Markstown has experienced an increase in the size of its labor force. On your graph above, show how this change affects the PPC of Markstown.Q.1 Table below presents different combinations of a simple economy that uses its resources to produce guns or/and butter Option Butter (tonnes) Guns (units) A 0 15 B 1 14 C 2 12 D 3 9 E 4 5 F 5 0 a) Construct the PPC by drawing guns production on the vertical axis and butter production on the horizontal axis and determine its slope. b) Consider that the economy is producing at option C. Explain the concept of the opportunity cost if the economy increased the production of butter and moved its production to point D c) Calculate the opportunity cost if there is a move from C to D and later a further move from D to E d) Is the opportunity cost increasing or decreasing as the economy produces more butter? Fully explain why
- Draw a production possibilities frontier (PPF) for oil and food, where food production (Qf) is in the vertical axis and oil production (Qo) is in the horizontal axis. Draw an initial production point on the PPF where the slope of the PPF equals minus the relative price of oil. Label this point 1. If the price of oil on world markets rises sharply due to political reasons, determine the change in production; label the new point on the PPF with a 2. How does this change in the price of oil affect the income distribution in the oil producing countries, assuming there are capital owners and workers involved in the production process?a) Draw a production possibilities frontier (PPF) for a society that produces two goods, guns and wheat. Suppose this society has two political parties, party R (who want a strong military) and party L (who want a smaller military). Show points on your diagram that party R and party L chooses. b) Show graphically whether your PPF will change if all the resources used for both the goods were equally suitable for production of guns and wheat? c) Assuming that b stands and if all the resources are used for the production of guns, 20 guns can be produced and if all the resources are used for production of wheat, 80 units of wheat can be produced, then what is the opportunity cost of producing one gun?Consider a trade economy with two people (A and B) and two goods (1 and 2). Person A's utility function is U A = x1x2 where xi is A's consumption of good i E (1, 2). Person B's utility function is U B = y1 + y2, where yi is B's consumption of good i = (1, 2). There are 20 units of each good in the economy. Which of the following allocations are efficient? (a) x1 = 10, x2 = 10, y1 = 10, y2 = 10. (b) x1 = 7, x2 = 7, y1 = 13, y2 = 13. (c) x1 = 0, x2 = 0, y1 = 20, y2 = 20. (d) x1 = 15, x2 = 10, y1 = 5, y2 = 10. (e) x1 = 12, x2 = 12, y1 = 6, y2 = 6.
- Suppose there are two individuals, Casey and Rick, who live in a very simplified world where only two goods are produced and consumed; rice and beans. The production opportunity cost for Casey is 4.00kg of rice for every kilogram of beans. Rick has a production opportunity cost of 2.00 kg of rice for every kilogram of beans. Casey eventually realizes that, through trade, both individuals can be better off. Rick is willing to trade. What price can be settled between these two parties such that both individuals can enjoy more rice and beans?In this assignment, you will demonstrate your ability to draw a simple production possibilities curve given data on the quantity of one input (labor) and the amount of labor required to produce each of two outputs (guns and butter). You should also be able to identify the opportunity cost of one good in terms of the other as the slope of the PPC. You will explain your analysis of the figures to explain why it’s not possible to produce combinations of the two goods outside the PPC.Guns or Butter?Suppose a nation has a total of 12 units of labor, which can be used to produce either guns or butter. One gun takes 6 units of labor to produce and 1 butter takes 2 units of labor to produce.Explain why scarcity exists in this economy. Use the data as evidence of your reasoning.What is the maximum quantity of guns that can be produced?What is the maximum quantity of butter than can be produced?Draw the nation’s production possibility curve.What is the opportunity cost of guns in this…The graph below represents a change to a PPF. Assume the production of cars is represented on the y-axis and the production of houses is represented on the x-axis. Which of the following events could be cause the illustrated change? more labor becomes available less labor becomes available better technology used to produce cars is discovered better technology used to produce houses is discovered Factories used to produce cars are destroyed Equipment used to build houses is destroyed Overall technology advances None of the events would result in the illustrated change O 0 0 O O O0 0