various intermediate quantities, Microeconomics

Assignment Help:
An economy can produce a maximum of either 28 million tons of wheat or 7,000 automobiles,
or various intermediate quantities, as depicted in the table below:

Wheat (millions of tons)
A28 ,B 7,C25,D 22,E 18,F 13,G 7,H 0
Automobiles (thousands of units)
A0,B1,C 2,D 3,E 4,F 5,G 6,H 7
a. Plot the data from the table on a graph, with wheat on the vertical axis and
automobiles on the horizontal axis.
b. Can this economy simultaneously produce 3,000 automobiles and 15 million tons of
wheat? Explain. Where would this point lie relative to the PPF?
c. Can this economy simultaneously produce 2,000 automobiles and 27 million tons of
wheat? Explain. Where would this point lie relative to the PPF?
d. Add a new row to the table listing the opportunity cost of producing the 1st through
the 7th automobiles. In what units is this opportunity cost measured?
e. What is the relationship between the opportunity costs you just calculated and the
slopes of the PPF graph?
f. Now consider if instead the economy decided to produce additional units of wheat and
fewer automobiles. In particular, consider if the economy moved from D to C. What is
the relationship between the opportunity cost of this move and the slope of the graph
connecting points C and D?
g. Can you explain why the opportunity cost of moving from point C to D is not the same
as the opportunity cost of moving from B to C? In particular, why is the opportunity
cost of moving from C to D higher than the opportunity cost of moving from B to C?
h. An alternative shape used to draw PPFs is simply a straight line. What underlying
assumption is reflected in a straightline PPF?

Related Discussions:- various intermediate quantities

Estimation based on the probit model, Let {(y i ; x i ); 1 ≤ i ≤ n} be an i...

Let {(y i ; x i ); 1 ≤ i ≤ n} be an i.i.d sequence of random variables where yi and xi satisfy the linear relationship y i = β 0 + β 1 x i + ∈ i with Cov(x i ; ∈ i ) = 0

Budget constraints, Budget Constraints   * The Budget Line - The budg...

Budget Constraints   * The Budget Line - The budget line indicates all the combinations of 2 commodities for which total money spent equals the total income. * The Budget

Define direct marketing, Direct Marketing This is a marketing tool des...

Direct Marketing This is a marketing tool designed to elicit instant action from the customer through direct contact.

Export entrepreneurship and use appropriate technology, Export Entrepreneur...

Export Entrepreneurship: This need be developed by providing necessary facilities and making export an attractive and profitable business proposition. In this connection, it

Assignment, state the law of downward sloping demand

state the law of downward sloping demand

Constructive political process for deficit, When Stockwell Day was leader o...

When Stockwell Day was leader of the Canadian Alliance Party (which soon became the new Conservative Party) he wrote that "the national debt is mortgaging our children's future." A

Ppc ., cars:0,2,4,6,8 tow truck:30,27,21,12,0

cars:0,2,4,6,8 tow truck:30,27,21,12,0

What is black economy, Defining black economy, If you pay your cleaner or ...

Defining black economy, If you pay your cleaner or builder in cash or for some reason neglect to tell the taxman which you were paid for a service rendered, you participate in the

Production function, what are the properties of cob-douglas production func...

what are the properties of cob-douglas production function

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd