Define a production possibility frontier

Assignment Help Business Economics

Reference no: EM132524625

Question 1: In the diagram below we see a long run average cost for production of a good. Copy this diagram and show:

(i) Copy this diagram and show economies and diseconomies of scale.

(ii) What is the difference between short run and long run cost curves? State two points.

(iii) What arc economies of scope? Give one example.

Question 2: A PPF curve shows different points on the graph:

(i) Define a Production Possibility Frontier (PPF)

(ii) List three sources of economic growth (outward shift)

(iii) List three sources of economic decline (inward shift)

Question 3: Draw a circular flow of economic activity and label the diagram in detail.

Question 4: Assume that Oman implements a combination of contractionary fiscal and monetary policies. What will be the effect of these policies on each of the following?
(i) Aggregate demand (ii) Price level (iii) Interest rates

Question 5: i) What is a business cycle?
(ii) Explain what is happening during each phase of the cycle with: (i) Output (ii) Employment (iii) Inflation

Question 6: The following table shows the number of donuts or cupcakes that John and Erica can each produce in one day:

	*Donuts*	*Cupcakes*
John	200	100
Erica	150	50

Who has the absolute advantage in producing donuts? Explain.

Who has the comparative advantage in producing donuts? Explain.

Question 7: The following table shows labour-market data for country X:

Employed	180000
Frictionally unemployed	10000
Structurally unemployed	5000
Cyclically unemployed	5000
Not in the labour force	100000
Calculate the unemployment rate in Country X. Show working.

Reference no: EM132524625

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