Microeconomics
2nd Edition
ISBN: 9781259813337
Author: KARLAN, Dean S., Morduch, Jonathan
Publisher: Mcgraw-hill Education,
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Chapter 2, Problem 2RQ
To determine
To explain:
The reason for the production possibilities frontier to be linear.
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Why is a production possibilities frontier typically drawn as a curve, rather than a straight line?
Suppose a production possibilities frontier includes the following combinations:
Cars
Washing Machines
0
1,000
100
600
200
0
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 difference between the Budget Constraint and Production Possibilities Frontier? How do you calculate the Opportunity Cost under each one?
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- What are the similarities between a consumer's budget constraint and society's production possibilities frontier, not just graphically but analytically?arrow_forwardHow could a society manage to end up consuming a bundle of goods that is beyond its production possibility frontier？ And, in doing so, how does it shift what it produces? Please include a graph that helps to illustrate your answer.arrow_forwardWhat is a production possibilities frontier? How can we show efficiency on a productions possibilities frontier? How can we show inefficiency? What causes a production possibilities frontier to shift outward?arrow_forward
- I don't understand how to draw a production possibilities frontier.arrow_forwardElijah and Aneesha are farmers. Each one owns a 14-acre plot of land. The following table shows the amount of maize and squash each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing maize or squash or to produce maize on some of the land and squash on the rest. Elijah Aneesha SQUASH (Pounds) 140 On the following graph, use the blue line (circle symbol) to plot Elijah's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Aneesha's PPF. 126 112 98 84 70 42 28 14 0 Maize (Pounds per acre) 10 18 0 Squash (Pounds per acre) 6 70 140 210 280 350 420 490 560 630 MAIZE (Pounds) 700 Elijah's opportunity cost of producing 1 pound of squash is squash is pounds of maize. Because Elijah has a comparative advantage in the production of squash, and Elijah's PPF Aneesha's PPF (?) Aneesha has an absolute advantage in the production of maize, and Aneesha has an absolute advantage in the production of squash. 2…arrow_forwardDrag the production possibilities frontier on the graph to show the effects of a time saving innovation in the manufacturing of carsarrow_forward
- Yakov and Ana are farmers. Each one owns a 20-acre plot of land. The following table shows the amount of corn and rye each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing corn or rye or to produce corn on some of the land and rye on the rest. Yakov Ana RYE (Bushels) On the following graph, use the blue line (circle symbol) to plot Yakov's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Ana's PPF. 200 180 160 140 120 100 80 60 40 20 Corn Rye (Bushels per acre) (Bushels per acre) 40 8 28 0 + 0 100 200 7 300 400 500 600 700 800 900 1000 CORN (Bushels) Yakov's opportunity cost of producing 1 bushel of rye is bushels of corn. Yakov's PPF Ana's PPF (?) bushels of corn, whereas Ana's opportunity cost of producing 1 bushel of rye is Because Yakov has a ▼ opportunity cost of producing rye than Ana, has a comparative advantage in the production of corn. has a comparative advantage in the…arrow_forwardIf the production possibilities frontier can be expressed as 4X2 + Y2 =16, then the point X=√3 (square root of 3, Y=2 is located a) inside the production possibilities frontier b) 0utside the production possibilities frontier c) in the wrong quadrant to be on the graph d) on the production possibilities frontier View comments (1)arrow_forwardThe accompanying graph contains the production possibilities frontier (PPF) for Rubberland. Rubberland only makes two products, rubber band balls and rubber hoses, and on a given day can produce according to the PPF in the graph. Point A on the PPF represents the combination of the two goods Rubberland currently produces. When a new method of rubber processing is discovered, the productivity of all Rubberland's inputs increases. Please shift the PPF to show this change. Assume that Rubberland does not make more rubber band balls than they originally made at point A but still maximize their productive capabilities. Move point A to their new production point. How many more rubber hoses do they now produce per day than before? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward
- The accompanying graph contains the production possibilities frontier (PPF) for Rubberland. Rubberland only makes two products, rubber band balls and rubber hoses, and on a given day can produce according to the PPF in the graph. Point A on the PPF represents the combination of the two goods Rubberland currently produces. When a new method of rubber processing is discovered, the productivity of all Rubberland's inputs increases. Please shift the PPF to show this change. Assume that Rubberland does not make more rubber band balls than they originally made at point A but still maximize their productive capabilities. Move point A to their new production point. How many more rubber hoses do they now produce per day than before?arrow_forwardRefer to Figure 3-3. If the production possibilities frontier shown for Bob is for 100 hours of production, then how long does it take Bob to make one burrito?arrow_forwardElijah and Aneesha are farmers. Each one owns a 16-acre plot of land. The following table shows the amount of maize and squash each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing maize or squash or to produce maize on some of the land and squash on the rest. Elijah Aneesha SQUASH (Pounds) On the following graph, use the blue line (circle symbol) to plot Elijah's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Aneesha's PPF. 160 144 128 112 96 80 64 48 32 16 0 Maize Squash (Pounds per acre) (Pounds per acre) 6 6 20 5 0 80 160 240 320 400 480 560 640 720 800 MAIZE (Pounds) Elijah's PPF Elijah's opportunity cost of producing 1 pound of squash is squash is pounds of maize. Because Elijah has a comparative advantage in the production of squash, and Aneesha's PPF has an absolute advantage in the production of maize, and ? has an absolute advantage in the production of squash. pounds of maize,…arrow_forward
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