ECON 201 Chapter Notes - Chapter 1-13: Opportunity Cost, Pennsylvania Route 10, Inferior Good

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emeraldyak734

17 Apr 2019

School

University of Calgary

Department

Economics

Course

ECON 201

Professor

Ronald Schlenker

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Document Summary

Tutorial problem set #1 (chapters 2 and 3) Ron schlenker: the following points are on a country"s production possibilities curve. Answer the following questions using this information. (put answers for part (f) here) Suppose technology improvements affecting allowed 50% greater production of both goods. Show the new production possibilities schedule in the table above. France: the number of hours to make one unit of the following commodities in germany and france are shown below. If germans continue to consume the same amount of cars as without trade, determine free trade production and consumption levels in each country and for the world as a whole. Tutorial problem set #2 (chapters 4 and 6) Ron schlenker: use the following information to answer the questions below. Quantity demanded of good x = qd = 140 - 8px + 6pa - 0. 001y. Quantity supplied of good x = qs = 10 + 12px. Price of good a = pa = 10.

Related Questions

What is the opportunity cost of moving from point a to point b?

A. 100 units of capital goods

B. 8 units of consumer goods

C. 90 units of capital goods

D. 10 units of capital goods

amaranthserval787

Problem 1

Below is a production possibilities table for consumer goods (food) and capital goods (machinery). Graph the data using Excel and then answer the following questions.

	A	B	C	D	E	F
FOOD	0	10	20	30	40	50
MACHINES	150	140	120	90	50	0

(a) What are the specific assumptions that underlie the production possibilities curve?

(b) What would be the cost of more food if the economy is at point C? What would be the cost of producing more machinery? How does the shape of the production possibilities curve reflect the law of increasing opportunity costs?

(c) What if this hypothetical economy were producing only 9 food and 130 machines and it was depicted by this production possibilities table and curve? What conclusions could be drawn about this economy's resource utilization?

(d)Can this economy produce outside its current production possibilities? How can technological changes affect the production possibilities curve? How can international trade permit consumption above its production possibilities curve?

byzantiumcrocodile871

MULTIPLE CHOICE QUESTIONS:

Note: Price elasticity of demand is given as an absolute value throughout.

The production possibility frontiers for Arboc and Arbez are shown below. Use this information for the next nine questions.

1. Which of the following is most likely to shift out the Arbocali production possibility frontier?
A. An increase in the general educational level of the Arbocali labor force.
B. An increase in the income of Arbocali consumers.
C. An increase in the purchase of stocks on the Arbocali Stock Exchange.
D. A reallocation of resources toward consumer goods.

2. If the Arbocali economy moves from Point A to Point B, the opportunity cost would be
A. 30 consumer goods.
B. 20 capital goods.
C. 40 capital goods.
D. 10 consumer goods.

3. If the Arbocali economy moved from Point A to Point B, we would expect
A. a decreased standard of living in the future as consumption has decreased.
B. increased unemployment in the future.
C. decreased unemployment in the future.
D. the economy to grow more rapidly in the future

4. Arbez is currently producing 25 consumer goods and 60 capital goods. If Arbez increases capital good production to 75, the opportunity cost will be
A. 15 consumer goods.
B. 0 consumer goods.
C. 5 consumer goods.
D. 10 consumer goods.

5. Both Arboc and Arbez are producing 30 consumer goods and each is on its production possibility frontier. We can conclude that
A. Both economies will grow equally rapidly.
B. Arboc will grow more rapidly than Arbez.
C. Arbez will grow more rapidly than Arboc.
D. Arboc is currently experiencing a higher rate of unemployment than Arbez.

6. Arbez becomes able to increase its maximum output of consumer goods. This indicates that the opportunity cost of consumer goods in Arbez has
A. decreased and the opportunity cost of capital goods has remained unchanged.
B. increased and the opportunity cost of capital goods has decreased.
C. increased and the opportunity cost of capital goods has remained unchanged.
D. decreased and the opportunity cost of capital goods has increased.

7. Arbez

ivoryraccoon415

ECON 201 Chapter Notes - Chapter 1-13: Opportunity Cost, Pennsylvania Route 10, Inferior Good

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