Microeconomics (12th Edition) (Pearson Series in Economics)
12th Edition
ISBN: 9780133872293
Author: Michael Parkin
Publisher: PEARSON
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Chapter 2, Problem 12APA
To determine
Identify the concept of increasing opportunity in
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Suppose a production possibilities frontier includes the following combinations:
Cars
Washing Machines
0
1,000
100
600
200
0
Graph the PPF, assuming that it has no curved segments.
What is the cost of producing an additional car when 50 cars are being produced?
What is the cost of producing an additional car when 150 cars are being produced?
What is the cost of producing an additional washing machine when 50 cars are being produced? When 150 cars are being produced?
What do your answers tell you about opportunity costs?
Q2. Why the Opportunity Cost rises in case of bowed outward PPF?
a. What is the opportunity cost of producing the first smartphone (point a to b) in terms of the number of hotdogs sacrificed? The cost of the second smartphone (point b to c)? The cost of the third smartphone (point c to d)?
b. Explain why PPF is a straight line and why sometimes it is bow-shaped?
c. In what ways is your standard of living different from that of your parents or grandparents when they were your age? Why have these changes occurred?
Chapter 2 Solutions
Microeconomics (12th Edition) (Pearson Series in Economics)
Ch. 2.1 - Prob. 1RQCh. 2.1 - Prob. 2RQCh. 2.1 - Prob. 3RQCh. 2.1 - Prob. 4RQCh. 2.1 - Prob. 5RQCh. 2.1 - Prob. 6RQCh. 2.2 - Prob. 1RQCh. 2.2 - Prob. 2RQCh. 2.2 - Prob. 3RQCh. 2.2 - Prob. 4RQ
Ch. 2.2 - Prob. 5RQCh. 2.3 - Prob. 1RQCh. 2.3 - Prob. 2RQCh. 2.3 - Prob. 3RQCh. 2.3 - Prob. 4RQCh. 2.3 - Prob. 5RQCh. 2.4 - Prob. 1RQCh. 2.4 - Prob. 2RQCh. 2.4 - Prob. 3RQCh. 2.4 - Prob. 4RQCh. 2.4 - Prob. 5RQCh. 2.5 - Prob. 1RQCh. 2.5 - Prob. 2RQCh. 2.5 - Prob. 3RQCh. 2 - Prob. 1SPACh. 2 - Prob. 2SPACh. 2 - Prob. 3SPACh. 2 - Prob. 4SPACh. 2 - Prob. 5SPACh. 2 - Prob. 6SPACh. 2 - Prob. 8SPACh. 2 - Prob. 9SPACh. 2 - Prob. 7SPACh. 2 - Prob. 10SPACh. 2 - Prob. 11APACh. 2 - Prob. 12APACh. 2 - Prob. 13APACh. 2 - Prob. 14APACh. 2 - Prob. 15APACh. 2 - Prob. 16APACh. 2 - Prob. 17APACh. 2 - Prob. 20APACh. 2 - Prob. 21APACh. 2 - Prob. 22APACh. 2 - Prob. 18APACh. 2 - Prob. 19APACh. 2 - Prob. 23APACh. 2 - Prob. 24APACh. 2 - Prob. 25APA
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- The principle of increasing marginal opportunity cost indicates that as a firm incrementally increases its output of one good, the opportunity cost increases. This results in the PPF being curved and not a straight line. a. True b. Falsearrow_forwardUsing your own words, describe the law of increasing opportunity costs. Be sure to explain why this phenomenon occurs and how it helps to contribute to the shape of the production possibilities frontier.arrow_forwardProductivity Table Soup per unit of labor Swords per unit of labor Wesley 30 25 Fezzik 10 30 What is Dean's opportunity cost of soup?arrow_forward
- Please help me explain how the economic concept of scarcity links production possibilities curves and comparative advantage. Explain how scarcity is the common foundation for PPCs and comparative advarrow_forwardIn Kessy’s old kitchen, he could bake 10 cookies or mix 15 glasses of lemonade in a day. Now he has a bigger oven and kitchen. Draw Kessy’s initial PPF assuming constant opportunity cost between cookies and lemonade. Label it PPF1. [For this question, let cookies be illustrated on the horizontal axis.] Given PPF1, what is the opportunity cost of producing more cookies? In other words, how much lemonade must Kessy sacrifice to produce, say, one more cookie? Draw Kessy’s new PPF (label it PPF2) after he receives the new appliances.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
- 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)arrow_forwardExplain what is illustrated by the production possibilities frontier. Also, why is a production possibilities frontier typically drawn as a curve, rather than a straight line?arrow_forwardGraphically show the production possibilities frontier for the nation of Stromboli, using the data given in the following table. Does the principle of increasing cost hold in Stromboli? Stromboli’s 2019 Production Possibilities Pizzas per Year Pizza Ovens per Year 75,000,000 0 60,000,000 6,000 45,000,000 11,000 30,000,000 15,000 15,000,000 18,000 0 20,000arrow_forward
- When technology of production improves what happens to the production possibilities frontier? does not affect the PPF. shifts the PPF inward, toward the origin. shifts the PPF outward, away from the origin. rotates the PPF outward, making it less steep.arrow_forwardSuppose that a nation currently is producing combination D in the table below and on the graph of the production possibilities curve to the right. What is the opportunity cost of producing 5.0 million more smartphones and moving to production combination C? Combination A B DCDEFG Smartphones (millions per year) 50.0 48.0 45.0 40.0 33.0 22.5 0.0 Tablets (millions per year) 0 10 20 30 40 50 60 The opportunity cost of producing 5.0 million more smartphones and moving from production combination D to production combination C is million tablet devices per year. (Enter your response as a whole number) 500 호 Smartphones (millions per year) 30- 20- 10- A 0 B C F 10 20 30 40 50 60 Tablet Devices (millions per year)arrow_forwardDraw a PPF for butter and guns production.a. Explain verbally and graphically the concept of “free lunch.” b. Explain verbally and graphically what movement between two production points on the PPF represents.Does this qualify as “a free lunch?” Why or why not?arrow_forward
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