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PanetD) Panel () 6.5 3.5 4.5 4.5 3.5 3.5 2.5 25 t.S 0s 183. Refer to Figure 2-8,

ID: 1134852 • Letter: P

Question

PanetD) Panel () 6.5 3.5 4.5 4.5 3.5 3.5 2.5 25 t.S 0s 183. Refer to Figure 2-8, Panel (a). Production at point K is a. possible and efficient. b. possible but inefficient. c. impossible but efficient. d impossible and inefficient. 184. Refer to Figure 2-8, Panel (a). Production is a possible at points J, K, L, and M, but efficient only at points J. L, and M c possible at points J, L, M, and N, but efficient only at points J. L, and M. 185. Refer to Figure 2-8, Panel (a). The movement from point M to point K could be caused b a. an advance in production technology b. an improvement in efficiency c. economic growth. d. unemployment. 186. Refer to Figure 2-8, Panel (a). The opportunity cost of moving from point J to point L is a. 2 donuts b. 2 donuts and 2 cups of coffee c. 2 cups of coffee d. 6 cups of coffee

Explanation / Answer

183. b) possible but inefficient

Combination lies inside PPF are possible to produce but considere inefficient because some resources are kept idle.

184. a) possible at points J, K, L and M, but efficient only at points J, L and M.

Possible combinations are those which lies or under PPF while efficient are those which lies on PPF.

185. d) unemployment

Economic growth, improvement in technology, improvement in efficiency causes increase in production of goods rather than decrease. Unemployment causes decrease in production of goods.

186. c) 2 cups of coffee

Movement from J to L means increase in production of donuts by 2 units causes decrease in production of coffee by 6 - 4 = 2 cups of coffee.

187. a) 2 donuts.

Movement from M to L causes decrease in production of donuts by 2 units due to increase in production of coffee by 4 cups.

188. a) 0 cups of coffee

Movement from K to L causes increase in donuts by 1 unit but no sacrifice of coffee.