Question 5A downward movement between points along the production possibilities frontier illustrates: a constant opportunity cost. depends on an individual's subjective values and opinions. If Helen can paint one room in the time it takes her to bake 40 cakes and Josh can paint one room in the time it takes him to bake 60 cakes, Helen's opportunity cost of baking one cake is equal to: If Helen can paint one room in the time it takes her to bake 40 cakes and Josh can paint one room in the time it takes him to bake 60 cakes, Josh's opportunity cost of baking one cake is: Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. B.resources are not fulley employed. Hans's opportunity cost of typing one page is: Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. In one week, Mohammed can knit 5 sweaters or bake 240 cookies. You can, however, sell the ticket. In the PPF, all points on the curve are points of maximum productive efficiency (no more output of any good can be achieved from the given inputs without sacrificing output of some good); all points inside the frontier (such as A) can be produced but are productively inefficient; all points outside the curve (such as X) cannot be produced with the given, existing resources. & The production possibility frontier is an economic model and visual representation of the ideal production balance between two commodities given finite resources. If Monica has a comparative advantage in baking and George has a comparative advantage in sewing, then: we can conclude nothing about absolute advantage. Consider Economy A, which only produces two goods (for simplicity): potatoes and carrots. the opportunity cost of Good A increases as the production of Good A increases. Jan must have a lower opportunity cost of shoe polishing. Which of the following economic questions does the decision to give all of the butter an economy produces to the homeless answer? the greatest achievable output levels are produced. It is possible for one person to have an absolute advantage in two tasks and a comparative advantage in only one. An unattainable combination of Good A and Good B. Each point on a production possibilities frontier requires full employment of resources. at all points along the production possibilities frontier? individual choices are reflected in a collective decisions and decisions are made by central planners, In one week, Mohammed can knit 5 sweaters or bake 240 cookies. Points inside the production possibilities frontier are attainable but inefficient The production possibilities frontier pivots up so that more of the good on the y-axis can be produced using the same amount of resources. Quiz Bee 1. O C. the points within the production possibilities frontier. So this is Scenario F. So what all of these points represent, these are all points-- now this is going to be a fancy word, but it's a very simple idea. Which of the graphs given below best illustrates the impact on the production possibilities frontier of a technological improvement that will make the use of the resources used to produce consumer goods more efficient? O d. Production Possibilities A production possibility frontier is used to illustrate the concepts of opportunity cost, trade-offs and also show the effects of economic growth. The figure given below shows the production possibilities frontier for mufflers and socks. Aisha's opportunity cost of knitting one sweater is: In one week, Mohammed can knit 5 sweaters or bake 240 cookies. Which of the following would cause the production possibilities frontier to shift from AA to BA? Show More To illustrate the PPF, we focus on two goods at a time and hold the quantities of all other goods and services constant. A. Suppose you have a choice of working full-time during summer or going to summer school full-time. The opportunity cost of baking cakes is lower for Josh. A. the greatest achivable output levels are illustrated, C. more of one good can be obtained without giving up more of PRODUCTION POSSIBILITIES AND OPPORTUNITY COST The production possibilities frontier (PPF) is the boundary between those combinations of goods and services that can be produced and those that cannot. The law of increasing opportunity cost explains why: the production possibilities frontier is curved. ; PPF RECAP . Dividing an assembly process into separate stages of production, The opportunity cost of going to college consists of more than just the tuition that will be paid. Maria can do 12 loads of laundry per hour, and she can type 8 pages per hour. The division of labor increases productivity because: tasks can be assigned according to individual abilities and skills. The following figure has four graph that show the production possibilities frontier for capital goods and consumer goods. A move from point A to point B indicates an increase in the number of computers produced. Summer tuition and books cost $2,000. It looks like your browser needs an update. Workers' morale increases as tasks become more specialized. A drought that affected food production but had no effect on education. So all of your time for berries, no time for rabbits. 0 rabbits, 300 berries. Janis has an absolute advantage in both the activities and a comparative advantage in typing. Therefore, _____. Allocative efficiency means that the particular mix of goods being produced—that is, the specific choice along the production possibilities frontier—represents the … Textbook solution for EBK INTERMEDIATE MICROECONOMICS AND ITS 12th Edition Snyder Chapter 1 Problem 1.8P. O b. the available production technology does not change. the other, D. more efficient output levels arepossible. This decrease is the opportunity cost of producing more computers. The cost of sending the ticket to someone through overnight mail is $20, and you have to spend $10 on a courier to get the ticket to the post office for overnight delivery. Question 11 of 18 1.0 Points At all points along the production possibilities frontier, _____ A. resources are not fully employed. We have step-by-step solutions for your textbooks written by … These are all points on you, as a hunter gatherer, on your production possibilities frontier. If dairy farmers use automatic milking machines instead of milking by hand, which of the following economic questions does their decision answer? Points within the curve show when a country’s resources are not being fully utilised On a given production possibilities frontier, which of the following is not assumed to be fixed? If you worked, you could earn $7,000. At Z, … That's right over there. In one week, Aisha can knit 15 sweaters or bake 480 cookies. A Maximum combination of output if all resources are fully employed B. Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. E.soceity is … At All Points Along The Production Possibilities Frontier? The figure given below shows the production possibilities frontier for education and food production. Don can produce 10 pens or 20 pencils in one hour, while Bob can produce 5 pencils or 15 pens in one hour. resources are equally adaptable to the production of either product. The figure given below shows the production possibilities frontier for capital goods and consumption goods Identify the correct statement. On a bowed production possibilities frontier, as you move down along the point curve O a. more of one good must be given up to receive one unit of the other good. The primary differences in economic structure among different countries relate to the ownership of resources and the manner in which economic activities are coordinated. The figure given below shows the production possibilities frontier for Good A and Good B. C. more of one good can be obtained without giving up more of the other. which of the following is a characteristic of a pure command economy? In the figure given below, when moving from point f to point g, the production of: Good B increases and the production of Good A decreases. Aisha's opportunity cost of baking one cookie is: one product is exchanged directly for another product. Pure capitalism and a pure command system are: two different ways of answering the basic economic questions. https://quizlet.com/364443461/chapter-2-macroeconomics-flash-cards Plot the Points. Maria can do 12 loads of laundry per hour, and she can type 8 pages per hour. The production possibilities curve is also called the PPF or the production possibilities frontier. The cost of sending the ticket to someone through overnight mail is $20, and you have to spend $10 on a courier to get the ticket to the post office for overnight delivery. Points on the production possibilities curve thus satisfy two conditions: the economy is making full use of its factors of production, and it is making efficient use of its factors of production. What do the points along the production possibilities frontier represent? Maria can do 12 loads of laundry per hour, and she can type 8 pages per hour. Opportunity cost is always measured in dollar terms, rather than in terms of real goods and services. However, at the last moment, you cannot take the trip. View desktop site. The law of comparative advantage does not apply to: If people specialize in producing those goods for which they possess a comparative advantage, then an economy as a whole can produce a greater quantity of goods. Practice: Interpreting graphs of the production possibilities curve (PPC) Imagine a national … Which of the following statements is true? Maria's opportunity cost of doing one load of laundry is: At all points along the production possibilities frontier,______. Production Possibilities and Opportunity Cost Any point inside the frontier, such as point Z, is inefficient. O B. the points of the horizontal and vertical intercepts. The study of economics does not presume to tell a society what choice it should make along its production possibilities frontier. Which of the following is an example of the division of labor? It shows businesses and national economies the optimal production levels of two distinct capital goods competing for the same resources in production, and the opportunity cost associated … At such a point it is possible to produce more of one good without producing less of the other good. If Daniel produces one pair of shoes in 4 hours and Sarah produces one pair of shoes in 3 hours, then: Sarah has an absolute advantage in shoemaking. The production possibilities frontier represents the boundary between attainable and unattainable prices of commodities. Maria's opportunity cost of typing one page is: Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. In one week, Aisha can knit 15 sweaters or bake 480 cookies. The Production Possibilities Frontier . at all points along the production possibilities frontier? If these are the only relevant costs to consider, the opportunity cost of going to summer school is: Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. O D. the points outside the production possibilities frontier. A straight-line possibilities frontier indicates that _____. Bill trades a ginger snap for a chocolate chip cookie. Suppose you have purchased a nonrefundable plane ticket. Thus, the slope of the PPF is relatively steep. If Helen can paint one room in the time it takes her to bake 40 cakes and Josh can paint one room in the time it takes him to bake 60 cakes, which of the following is true? A model economy in which everything … As resources are not perfectly adaptable to the production of both Good A and Good B, _____. Which of the following is measured along an axis of the production possibilities frontier diagram? PPCs for increasing, decreasing and constant opportunity cost. Points on the frontier are efficient. At various points along the production possibilities frontier, a. the greatest achievable output levels illustrated b. resources are not fully employed c. more of one good can be obtained without giving up more of the other d. more efficient output levels are possible e. society is equally well off A point outside the production possibilities frontier a. represents unemployment of … Centralized economic planning is used to answer the basic economic questions. If you paid $700 for the ticket, which of the following is the minimum amount you should accept for the ticket? The best way to show a country’s available resources, along with the maximum two goods produced from those resources, is by calculating the production possibilities frontier (PPF). C. the greatest achievable output levels are produced. Economic growth will allow the economy to produce at a point that lies on a higher production possibilities frontier. Privacy In one week Mohammed can knit 5 sweaters or bake 240 cookies. Hans and Maria would both be better off if: Hans specialized in typing and Maria in doing laundry, trading with each other for the other service. For another example, consider the chart below. Mohammed's opportunity cost of knitting one sweater is: can create problems of boredom and repetitive motion injuries. The production possibilities frontier represents all desirable combinations of outputs. In other words, if more of good A is produced, less of good B can be produced give… A minimum combination of output if all resources are fully employed C. A Maximum combination of input if all resources are fully employed D. A Minimum combination of input if all resources are fully employed 2. Terms D. society is equally well off. Your rent for the summer is $1,000 irrespective of your choice.

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