HOMEWORKI QUESTION The production possibilities curve below shows the hypothetic
ID: 1162636 • Letter: H
Question
HOMEWORKI QUESTION The production possibilities curve below shows the hypothetical relationship between the production of guns (national defense) and butter (social goods) in an economy. Refer lo the table to complete parts a-d Combinalion Gans Butcr 14 3 26 36 a) What is the marginal oppertunity cost of peoducing the second unit of butler b) What is the lotal opportunity cest of producing the second unit of buer? What is the marginal opportunity cost of producing the thied unit of buer d) What is the total opportunity cost of producing the third unit of butter QUESTION2 0 Civilian GoodsButter) Refer to the graph to complete parts e-h e) Which poines are eflicient? Which points are inefficient g) Which points are attainable? h) Which points are unabttainable? Refer to the graph to complere parts iHow dees the following effect the PPF i) The population becomes more educated over time as the namber of high school dropouts falls and the namber of collepe graduates rises The unemployment rate declines from 7.3 to 4.5 peroent of the labor force k) Advances in selccommunications and new technology sinificantly contribute to coonomic growth over time. I The Congress and the President decide to allocate more resources to national defense m) A nation participates in increased international trade with other nations of the woeld. There is an advancement in fireams technology that enly impacts the production of war poodsExplanation / Answer
Ans 1)
Marginal Opportunity Cost for producing 2nd unit of butter is 12 guns
Total Opportunity cost for producing 2 untis of butter is sum of individual marginal opportunity costs till 2nd unit of butter=( 12+10+8=30)
Marginal Opportunity Cost for producing 3rd unit of butter is 14 guns
Total Opportunity cost for producing 2 untis of butter is sum of individual marginal opportunity costs till 2nd unit of butter=( 14+12+10+8=44)
Ans 2)
Pointd on PPF are attainabe and effiecient
Points below PPF are inefficient and attainable
Points above PPF are unattainable
Hence Points a,b,c are attainable
Point a is inefficient & Point b & c are efficient
Point d is unattainable.
Combination Gun G Difference Butter B Difference MC Guns MC Butter A 0 4 B 14 14 3 1 (1/14) 14 C 26 12 2 1 (1/12) 12 D 36 10 1 1 (1/10) 10 E 44 8 0 1 (1/8) 8Related Questions
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