Refer to the following production possibilities curves. Curve (a) is the current curve for the economy. Given production possibilities curve (a), the combination of capital and consumer goods indicated by point L Consumer goods Select one: O O (a) (b) Capital goods a. would entail an inefficient use of society's resources. b. is beyond the productive capacity of this society.
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- The productive capability of an economy is such that to produce 5 units of military good it takes 2 workers to be employed while 10 units of consumer goods require 3 workers. Resources are limited in such a way that only 75 units of military good can be produced when all resources are employed. a) Construct the production possibility schedule and curve for this economy. b) Graphically represent what would happen if 12 additional workers were added to the economy. c) Graphically represent what would happen if the productivity of the workers were reduced to 2 units of military good and 5 units of consumer goods. d) Graphically represent what would happen if productivity for military goods remained the same but it now required 2 workers to produce 10 units of consumer goodsExplain how (if at all) each of the following events affects the location of a country’s production possibilities curve:a. The quality of education increases.b. The number of unemployed workers increases.c. A new technique improves the effifi ciency of extracting copper from ore.d. A devastating earthquake destroys numerous production facilities.Consider a Production Possibility Frontier that bows outward. Suppose the production of one good increases. As a result opportunity cost of producing this good will __________ because productive resources ___________________ in their suitability for producing different kinds of goods. A. increase; differ B. decrease; are the same C. increase; are the same D. decrease; differ
- A production possibilities table for two products, Consumption goods and Capital goods, is found below. Usual assumptions regarding production possibilities are implied. Consumption goods are measured in tons, and Capital goods are measured per unit. Combination Consumption goods Capital goods A 6 18 33 D 45 3 E 54 2 F 60 1 G 63 i. Sketch a production possibilities curve from the above information. ii. Using the information given in the above schedule, describe the concept of increasing opportunity cost. i. Suppose the economy is producing at a point inside the PPC. Give at least two reasons why this could occur. What could be done to move the economy to a point on the PPC? iv. “As compared to production combination F, the economy would experience higher growth rates in the future if production combination B is currently chosen." Comment this statement. v. Given the various possible production combinations of consumption and capital goods above, how does the society decides on the best…Using Figure 1.3 above, an increase in the capacity to produce can be represented by a movement from: 1: Point D to Point C. 2: Point F to Point D. 3: Point B to Point C. 4: Point B to Point F.Which of the following are made constant when applying the production possibilities curve theory? Select one: a. Trading rate between goods b. Total exports and imports c. Total number of factors of productions d. International pricing
- QUESTION ONE 1.1 The purpose of consumption of goods by an individual is to derive satisfaction from the consumption of these goods. Consumer goods can be classified into three main categories. Discuss these categories of goods. 1.2 Explain the meaning of a complete outward shift of the production possibility frontier. Use a diagram to substantiate your answer.A production possibilities table for two products, Consumption goods and Capital goods, is found below. Usual assumptions regarding production possibilities are implied. Consumption goods are measured in tons, and Capital goods are measured per unit. Combination Consumption goods Capital goods A 0 6 B 18 5 C 33 4 D 45 3 E 54 2 F 60 1 G 63 0 1. Sketch a production possibilities curve from the above information. 2. Using the information given in the above schedule, describe the concept of increasing opportunity cost. 3. Suppose the economy is producing at a point inside the PPC. Give at least two reasons why this could occur. What could be done to move the economy to a point on the PPC? 4. “As compared to production combination F, the economy would experience higher growth rates in the future if production combination B is currently chosen.” Comment this statement. 5. Given the…Which statement concerning a production possibilities curve is not true? a. it is usally linear b. a point outside it is currently impossible c. a trade-off exsists along such a curve d. a point inside the curve represents an ineffecient use of resources
- Specify and explain the typical shapes of marginal-benefifit and marginal-cost curves. How are these curves used to determine the optimal allocation of resources to a particular product? If current output is such that marginal cost exceeds marginal benefifit, should more or fewer resources be allocated to this product? Explain.In the production model developed and presented in classes, which of the following is NOT an exogenous variable or a parameter? O the total factor productivity O the supply of capital O the supply of labor the amount of capitalQuestion 22 Refer to the production possibilities schedule below, which shows a hypothetical society's production alternatives between consumer goods and capital goods. Calculate the opportunity cost of each activity. Note: Write your answer as a fraction. Capital Consumer Goods Goods 100 0 90 120 70 40 0 200 240 260 OC Consumer Goods OC Capital Goods