The production possibilities curve below shows the hypothetical relationship between the production of food and clothing in an economy.
Combination
Food
Clothing
A
0
4
B
7
3
C
13
2
D
18
1
E
22
0
Instructions: Enter all values as whole numbers.
a) What is the marginal opportunity cost of producing the first unit of clothing?
______
units of food
b) What is the total opportunity cost of producing the first unit of clothing?
______
units of food
c) What is the marginal opportunity cost of producing the fourth unit of clothing?
________
units of food.
d) What is the total opportunity cost of producing the fourth unit of clothing?
________
units of food.
e) Is 5 units of food and 2 units of clothing attainable or unattainable, given these production possibilities?
________
The production possibilities curve below shows the hypothetical relationship between the production of food and clothing in an economy.
| Combination | Food | Clothing |
|---|---|---|
| A | 0 | 4 |
| B | 7 | 3 |
| C | 13 | 2 |
| D | 18 | 1 |
| E | 22 | 0 |
Instructions: Enter all values as whole numbers.
a) What is the marginal opportunity cost of producing the first unit of clothing?
______
units of food
b) What is the total opportunity cost of producing the first unit of clothing?
______
units of food
c) What is the marginal opportunity cost of producing the fourth unit of clothing?
________
units of food.
d) What is the total opportunity cost of producing the fourth unit of clothing?
________
units of food.
e) Is 5 units of food and 2 units of clothing attainable or unattainable, given these production possibilities?
________
Related textbook solutions
Related questions
Problem
#1 ( Budget Lines) :
Suppose that Russ has budgeted $20 a month to buy candy bars, music downloads, or
some combination of each. If Russ buys only candy bars he can obtain 40 bars a month; if
he buys only downloads, he can buy 20 a month.
1. What is the price of a candy bar?
2. What is the price of a music download?
3. What is the opportunity cost of a music download?
4. What is the opportunity cost of a candy bar?
5. Would the opportunity cost of each good change if Russ decided to increase his
monthly budget to $30 for the two items?
Problem #2 ( Production Possibilities ):
Suppose that a nation's production possibilities can be represented by the table below:
Production Alternatives
| Product Alternatives | |||||
| Products | A | B | C | D | E |
| Food | 0 | 4 | 8 | 12 | 16 |
| Clothing | 20 | 18 | 14 | 8 | 0 |
Products A B C D E
Food 0 4 8 12 16
Clothing 20 18 14 8 0
1. What is the maximum amount of food this economy can produce? How much clothing
can it produce at this point?
2. If the economy is producing at alternative C, what is the cost of one more unit of
food?
3. If the economy is producing at alternative C, what is the cost of one more unit of
clothing?
4. Is this economy subject to the law of increasing opportunity costs? How can you tell?
5. Suppose the economy is currently producing 4 units of food and 16 units of clothing.
Is this economy producing efficiently?
The following table represents a society's production possibilities schedule for two categories of goods: Donuts and Nuclear Power Plants
| Combination | DONUTS (units) | NUCLEAR POWER PLANTS (units) |
|---|---|---|
| A | 155 | 0 |
| B | 150 | 1 |
| C | 140 | 2 |
| D | 120 | 3 |
| E | 80 | 4 |
| F | 0 | 5 |
Construct a production possibilities curve on graph paper with units of NUCLEAR POWER PLANTS on the horizontal axis and units of DONUTS on the vertical axis. (DO NOT SUBMIT THE GRAPH).
- Can this nation currently produce 15 units of NUCLEAR POWER PLANTS? Explain.
- Can this nation currently produce 100 units of DONUTS? Explain.
- What is the marginal opportunity cost of the 5th unit of NUCLEAR POWER PLANTS?
- What is the marginal opportunity cost of the 3rd unit of NUCLEAR POWER PLANTS?
- Does this production possibilities curve reflect the law of increasing opportunity costs? Explain.
- Suppose this nation is currently producing 40 units of DONUTS and 3 units of NUCLEAR POWER PLANTS. Describe where this point is with reference to the position of the production possibilities curve.
The following table represents a society's production possibilities schedule for two categories of goods: Donuts and Nuclear Power Plants
| Combination | DONUTS (units) | NUCLEAR POWER PLANTS (units) |
|---|---|---|
| A | 155 | 0 |
| B | 150 | 1 |
| C | 140 | 2 |
| D | 120 | 3 |
| E | 80 | 4 |
| F | 0 | 5 |
Construct a production possibilities curve on graph paper with units of NUCLEAR POWER PLANTS on the horizontal axis and units of DONUTS on the vertical axis. (DO NOT SUBMIT THE GRAPH).
- Can this nation currently produce 15 units of NUCLEAR POWER PLANTS? Explain.
- Can this nation currently produce 100 units of DONUTS? Explain.
- What is the marginal opportunity cost of the 5th unit of NUCLEAR POWER PLANTS?
- What is the marginal opportunity cost of the 3rd unit of NUCLEAR POWER PLANTS?
- Does this production possibilities curve reflect the law of increasing opportunity costs? Explain.
- Suppose this nation is currently producing 40 units of DONUTS and 3 units of NUCLEAR POWER PLANTS. Describe where this point is with reference to the position of the production possibilities curve.
