Econ Ch 1 Assignment

What is the (opportunity) cost of 6 more forklifts?

2 automobiles

Pham can work as many or as few hours as she wants at the college bookstore for $9 per hour. But due to her hectic schedule, she has just 15 hours per week that she can spend working at either the bookstore or at other potential jobs. One potential job, at a café, will pay her $12 per hour for up to 6 hours per week. She has another job offer at a garage that will pay her $10 an hour for up to 5 hours per week. And she has a potential job at a daycare center that will pay her $8.50 per hour for as many hours as she can work.

4 hours

b. If the economy is at point C, what is the (opportunity) cost of 2 more automobiles?

9 forklifts

Which point, A or B, best represents the combination of present and future goods in the United States?

A

Which point, A or B, best represents the combination of present and future goods in China?

B

For each of the following situations involving marginal cost (MC) and marginal benefit (MB), indicate whether it would be best to produce more, fewer, or the current number of units.

More Fewer Current number More Fewer

c. Now draw a production possibilities curve that reflects technological improvement in the production of both goods.

Move both points up/right one tick

a. Suppose improvement occurs in the technology of producing forklifts but not in the technology of producing automobiles. Draw the new production possibilities curve.

Move the '30' point to the right one tick

b. Now assume that a technological advance occurs in producing automobiles but not in producing forklifts. Draw the new production possibilities curve

Move the '8' point up one tick

d. Is production at a point outside the production possibilities curve currently possible? Could a future advance in technology allow production beyond the current production possibilities curve? Could international trade allow a country to consume beyond its current production possibilities curve?

No; Yes; Yes

Which production possibilities curve best represents future growth in the United States?

PPC2

Which production possibilities curve best represents future growth in China?

PPC3

Which characteristic of the production possibilities curve reflects the law of increasing opportunity costs: its shape or its length?

Shape

c. If the economy characterized by this production possibilities table and curve were producing 3 automobiles and 20 forklifts, what could you conclude about its use of available resources?

Underutilizing

Upon what specific assumptions is this production possibilities curve based?

full employment, fixed supplies of resources, fixed technology and two goods

Suppose a city block was going to be used for a parking lot. The opportunity cost would be

greater in New York City because the alternative uses of the block are more valuable.

In a market system scarce goods are allocated through the operation of

what must be sacrificed in using a resource for its next best use.