Plot the PPF on the following diagram above. What is the opportunity cost of producing 1 more capital good as the economy moves from point A to point B? SHO YOUR WORK. Explain the term "increasing opportunity costs"? Why do increasing costs arise?
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- Save Use the following production possibilities frontier for a country to answer the following questions. Which point(s) are unattainable? Briefly explain why. Point A because it is inside the production possibilities frontier. O All the points because the production of each has an opportunity cost. O Point E because it is outside the production possibilities frontier. O None of the points because they all are feasible. O Points B, C, and D because they are on the production possibilities frontier. A D PPF Consumption goods E. B. Capital goodsscenario 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.American and Japanese workers can each produce 4 cars a year. An American worker canproduce 10 tons of grain a year, whereas aJapanese workers can produce 5 tons of grain ayear. To keep things simple, assume that eachcountry has 100 million workers.a. For this situation, construct a table analogousto the table in Figure 1.b. Graph the production possibilities frontier ofthe American and Japanese economies.c. For the United States, what is the opportunitycost of a car? Of grain? For Japan, what is theopportunity cost of a car? Of grain? Put thisinformation in a table analogous to Table 1.d. Which country has an absolute advantage inproducing cars? In producing grain?e. Which country has a comparative advantagein producing cars? In producing grain?f. Without trade, half of each country’s workersproduce cars and half produce grain. Whatquantities of cars and grain does each country produce?g. Starting from a position without trade, givean example in which trade makes each country better…
- Use the following production possibilities frontier for a country to answer the following questions. Which point(s) are unattainable? Briefly explain why. Point A because it is inside the production possibilities frontier. Point E because it is outside the production possibilities frontier. E All the points because the production of each has an opportunity cost. C None of the points because they all are feasible. Points B, C, and D because they are on the production possibilities frontier. A D PPE Consumption goods -... Capital goodsWhen does a country have a comparative advantage over producing a good? Explainwith examples.Activity Imagine that a country can produce just two things: goods and services. Assume that over a given time period it could produce any of the following combinations: Units of goods 0 10 20 30 40 50 60 70 80 90 100 Units of services 80 79 77 74 70 65 58 48 35 19 a. Draw the country's production possibility curve. b. Assuming that the country is currently producing 40 units of goods and 70 units of services, what is the opportunity cost of producing another 10 units of goods? c. Explain how the figures illustrate the principle of increasing opportunity cost.
- K The figure to the right shows various points on three different production possibilities frontiers for a nation. is the result of advancements in plastic A movement from production technology. A. W to X B. V to X C. Y to Z D. Z to W Food products Plastic productsReview the numbers for Canada and Venezuela from Table 33.12 which describes how many barrels of oil and tons of lumber the workers can produce. Use these numbers to answer the rest of this question. a. Draw a production possibilities frontier for each country. Assume there are 100 workers in each country. Canadians and Venezuelans desire both oil and lumber. Canadians want at least 2,000 tons of lumber. Mark a point on their production possibilities where they can get at least 3,000 tons. b. Assume that the Canadians specialize completely because they figured out they have a comparative advantage in lumber. They are willing to give up 1,000 tons of lumber. How much oil should they ask for in return for this lumber to be as well off as they were with no trade? How much should they ask for if they wanttogainfromtrading withVenezuela? Note: Wecanthinkofthis“ask”astherelativepriceor trade price of lumber. c. Is the Canadian “ask” you identified in (b) also beneficial for Venezuelans? Use…A В Bread On the PPF above, the economy is currently at point B. How can the economy produce at point E? By producing less wine. By producing less bread. Through economic growth due to more resources or better technology. This economy will never be able to product at point E. Wine
- Suppose two countries produce the same twogoods and have identical production possibilitiesfrontiers. Do you expect these countries to trade?Explain why or why not.Below table shows the production possibilities for the country of Emilon: A B C D Rice 40 72 96 112 Beef 30 27 21 12 Complete the following (approximate) possibilities for Emilon. a. Emilon can produce 104 rice and beef. b. Emilon can produce rice and 24 beef. Which of the following product combinations is Emilon capable of producing? C. Can Emilon produce 80 rice and 24 beef? (Click to select) d. Can Emilon produce 56 rice and 21 beef? (Click to select)Use the following production possibilities frontier for a country to answer the following questions. Which point(s) are unattainable? Briefly explain why. O Point A because it is inside the production possibilities frontier. All the points because the production of each has an opportunity cost. B E Point E because it is outside the production possibilities frontier. None of the points because they all are feasible. A Points B, C, and D because they are on the production possibilities frontier. Which point(s) are efficient? Briefly explain why. A Points A, B, C, and D because they are attainable. O Points B, C, and D because this is where maximum output is produced with available resources. PPF Point A because it is inside the production possibilities frontier. Point E because it is where the most capital and consumption goods combined are produced. Consumption goods O Point B because it is where the most resources are used to produce capital goods. Which point(s) are inefficient?…