Production Curves + Mastery Test

Select the correct answer from each drop-down menu. Scarcity exists when there are _______ resources to meet unlimited needs and wants. Because of _______, we must make choices about how to use resources. All the options for using resources that are not chosen are called _______. _______ is the next-best alternative for the use of resources. Marginal means using one _______ unit of a resource.

-limited -scarcity -trade-offs -Opportunity cost -additional

Drag each description to the correct location on the graph. This graph is the production possibility curve for a country's combined production of good A and good B. Match each description to the point on the graph that it best corresponds with.

(dots left to right) 1st dot: The country's unemployment rate has increased drastically 2nd dot: There are still many people without jobs, but the country's unemployment rate has decreased 3rd dot: The country is using its resources efficiently 4th dot: The country wishes to produce an amount of both goods that is clearly unattainable

Part G What type of entrepreneurial activity would help in this situation?

Entrepreneurial activities such as finding a cure or a treatment for this deadly disease would help in this situation.

Part B What practice among those who have lost a family member in West Africa contributed to the early spread of this disease?

The practice of washing the bodies of the dead before burial contributed to the early spread of this disease.

Activity Use the information from the video and your knowledge of economic concepts to answer these questions. Part A Which scarce resource led the leader of Dubai to make drastic changes to his country?

The scarcity of oil led the leader of Dubai to make changes to his country.

What are factors of production?

all the resources used to produce any goods and services

In the construction of a new housing development, which factor of production can be categorized as land?

solar power

Select the correct location on the graph. A country is at efficiency at point A. Recently, this country has had a surge of healthy immigrants of working age. Which PPC represents the shift in this country's economy?

the top dot connecting 60 and 70

A country specializes in agricultural production—in particular, pineapples and coconuts. Last year, its economy was operating efficiently at point A. To capitalize on its favorable climate for growing these fruits, the country decides to build some islands near its coast to use for growing pineapples and coconuts. Which PPC represents the change that results from this decision?

not bottom left

Match each scenario with its effect on the PPC.

1. A manufacturing unit uses all its resources efficiently: a point on the original PPC 2.Andrew has 5 hours to complete his homework but uses only 3 hours, so he doesn't complete it: a point inside the PPC 3. A country acquires part of its neighboring country: NOT A POINT OUTSIDE THE PPC

Select the correct answer from each drop-down menu. This production possibilities curve shows the possible output for a leather goods manufacturer.

3,000 2,000 5,000

Type your response in the box. Read these scenarios about two different countries. Think about the change in the countries' resources as you read about their situations. Scenario 1Country A has a high population but is short of land suited for agriculture. Realizing that its military is much stronger than that of a weaker neighboring country, country A declares war on its neighbor and wins. As a result, country A takes over a portion of its neighboring country that is rich with fertile farmland. Scenario 2Country B has a relatively low population and a low level of manufacturing, but it has large regions of land that are good for agriculture. Country B is a major exporter of agricultural goods. Unfortunately, an earthquake and subsequent tsunami devastate the country with massive flooding and loss of life. What is the impact of these two scenarios on the resources of countries A and B?

Country A gains resources in the form of fertile farmland. Country B loses land and labor resources.

Type your response in the box. Let's say you just bought a new pair of jeans and a sweater. List as many of the resources and factors of production that went into producing these items of clothing as you can think of.

Here are some possible responses: - cotton - indigo dye - sewing machines - workers - wool - computers to design - trucks and gasoline for shipping to the store - machines to cut the material - plastic or paper for the tags - wood pulp for cardboard shipping boxes

Part E Which factor of production has been most affected by the many deaths? Explain your answer.

Labor is the factor of production most affected by the deaths. The deaths reduce the number of healthy people who are available to work, reducing labor resources.

Drag each resource to the correct location on the table. Let's say you just bought a new cell phone. Listed here are some of the many resources that went into producing that phone. Categorize the resources according to factors of production.

Land: - The mineral copper -Wood pulp for making packaging -the mineral tungsten -oil Labor: -engineers -salespeople -designers -production workers Capital: -trucks and airplanes -machines on which phones are produced -production knowledge -engineering knowledge Entrepreneurship -the company founder's ability to create the company and market the phone

Part C Complete the table to show how Dubai is using its factors of production

Land: (resource/use) -air/building new structures vertically in the air -sand/building new islands at sea Labor: -construction workers/building the Burj Khalifa Human Capital: -engineering skill/building a ski slope in the desert Physical capital: -machinery/cranes used for construction Entrepreneurship: -leader's action to develop the city/making Dubai into a business and entertainment center for the Middle East

Part D How many people have died so far from Ebola in West Africa?

More than 10,800 people have died so far from Ebola in West Africa.

Part B Which factor of production does the resource you named in part A fall under?

Oil is considered land.

Part C How did food contribute to the early spread of Ebola?

People who cleaned or prepared bush meat from infected animals were at risk of contracting the disease.

Question 2 Imagine you are a researcher with a pharmaceutical company who has just discovered a new drug that may potentially cure Ebola. Compose a three-paragraph memo to the chief executive officer of the company that addresses these aspects of the situation: Summarize the situation in West Africa, including the impact on the economies of the affected countries and the resources that are scarce. Discuss the resources you have used to discover the drug or will need to continue producing it. (Take an educated guess at what you will need for this part, just be sure to classify your needs into the proper factor of production.) Discuss the opportunity cost to the company in devoting more resources to the production and distribution of the new drug. Applying your knowledge of the factors of production and PPCs, explain the impact that your drug could have on the economies of countries in West Africa affected by the Ebola virus.

The Ebola epidemic is still ravaging West Africa, and the death toll has passed 10,000. The labor force and human capital of the economies of the countries affected by Ebola are declining with the increasing number of deaths and people infected with Ebola. The reduction in labor resources caused by the many deaths and the underutilization of human capital caused by the large number of sick people is leading to a decline in output I have invented an antiviral drug that will cure this deadly disease. The drug is made from a batch of antiviral culture along with minute concentrations of potassium chloride. To produce this drug on large scale, we will need certain capital—sodium chloride, lab equipment, syringes, and oxygen devices to help with breathing. Moreover, we will also need labor in large numbers to act as support and nursing staff who will distribute and administer the drug. The capital needed for this drug is currently used for producing and distributing an antiviral drug for influenza. Considering the urgent need we are facing, I believe that the antiviral drug for the deadly disease Ebola is the need of the hour, and the firm therefore should transfer its resources from producing the flu drug to producing the Ebola antiviral drug. The firm will face a trade-off here, which will lead to a decrease in the production of the flu drug. However, this new drug will certainly improve the condition of those affected by Ebola. Within a few years, I am sure that the countries that suffered the epidemic will recover their labor. We can soon expect an increase in their production possibilities and a right shift in their PPCs.

If 200 people have been working on developing a new community that will feature houses and small businesses, what will happen to the PPC of the community if 100 people withdraw from developing the community?

The PPC will shift to the left

Part F As a result of the Ebola outbreak in West Africa, what could you anticipate would happen to the PPCs of the affected countries? Explain your answer.

The PPCs of the countries affected would shift to the left. Since the resource (labor) decreases, the production possibilities decrease, causing the PPC to shift left.

Question 1 Read this article about the Ebola virus, and use the information to answer the questions that follow. Part A How long do the bodies of people who have died from Ebola stay infectious?

The body stays infectious for seven days after the person dies.

Select the correct location on the graph. Point A shows a country's current production of wheat and rice. The country has decided to shift production from wheat to rice while still using its resources efficiently. But the country still needs some quantity of wheat produced annually. Which point shows this change in resource allocation?

dot on (8,4)

Select the correct location on the graph. A country is at efficiency at point A. This country has been involved in a long war in which thousands of its young men and women died. Which PPC represents the economy after the war?

the bottom dot connecting 40 and 50