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(c) Imagine that in Professor Branchland there are two political par- ties, called the Brokesters (who want many casinos) and the Rich- sters (who want fewer casinos). Show a point on your production possibilities frontier that the Brokesters might choose and a point that the Richsters might choose.

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Keith Leannon
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18 Jul 2018

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Related questions

Imagine a society that produces military goods and consumer goods, which we’ll call “guns” and “butter.”

a. Draw a production possibilities frontier for guns and butter. Using the concept of opportunity cost, explain why it most likely has a bowed-out shape.

b. Show a point that is impossible for the economy to achieve. Show a point that is feasible but inefficient.

c. Imagine that the society has two political parties, called the Hawks (who want a strong military) and the Doves (who want a smaller military). Show a point on your production possibilities frontier that the Hawks might choose and a point that the Doves might choose.

d. Imagine that an aggressive neighboring country reduces the size of its military. As a result, both the Hawks and the Doves reduce their desired production of guns by the same amount. Which party would get the bigger “peace dividend,” measured by the increase in butter production? Explain

Imagine a society that produces military goods and consumer goods, which we will call "guns" and "butter".

a. Draw a production possibilities frontier for guns and butter. Using the concept of opportunity cost, explain why it most likely has a bowed out shape.

b. Show a point that is impossible for the economy to achieve. Show a point that is feasible but inefficient.

c. Imagine that the Society has two political parties, called Hawks (who want a strong military) and the Doves (who want a small military). Show a point on your production possibilities frontier that the Haws might choose and a point that the Doves might choose.

d.Imagine that an aggressive neighboring country reduces the size of its military. As a result, both the Hawks and the Doves reduce their desired production of guns by the same amount. Which party would get the bigger "peace dividend," measured by the increase in butter production? Explain.

1. Where can an economy not produce?

a. Inside its production possibilities frontier

b. On its production possibilities frontier.

c. Outside its production possibilities frontier.

d. At the endpoints of its production possibilities frontier.

 

2. When an economy is operating at a point on its production possibilities frontier, then

a. Consumers are content with the mix of goods and services that are being produced.

b. There is no way to produce more of one good without producing less of the other.

c. Equal amounts of the two goods are being produced.

d. All of the above are correct.

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