Why an automaker whose production possibilities frontier

Assignment Help Macroeconomics
Reference no: EM13181780

1. Given the elasticities in question 2. and assuming that higher gasoline taxes would not shift either the SUV supply curve or the hybrid supply curve,

a. explain how higher gasoline taxes would affect the equilibrium price and quantity of SUVs.
b. explain how higher gasoline taxes would affect the equilibrium price and quantity hybrids. Use supply and demand curves to illustrate your answers.

4. Given your answer to question 3., how would higher gasoline taxes affect the price of SUVs relative to hybrids? Explain.

5. Using your answer to question 4., explain why an automaker whose production possibilities frontier (PPF) exhibits constant opportunity cost would stop producing SUVs and completely specialize in the production of hybrids.

6. Using your answer to question 4., explain why an automaker whose production possibilities frontier (PPF) exhibits increasing opportunity cost would produce more hybrids and fewer SUVs, but would not completely specialize.

Reference no: EM13181780

Questions Cloud

Explain what is the activation energy of the new pathway : The activation energy of the orginal pathway is 106 KJ/mol. What is the activation energy of the new pathway, all other factors being equal?
What is the solow growth rate : Assume that all wages and prices are completely and immediately flexible. If the growth rate of the money supply is 5%, the growth rate of the velocity of money is 8% and the inflation rate is 9%, what is the Solow growth rate?
What the results of the regression equation : develop a regression equation using any data. Use the regression equation to focus the demand for the product you chose for the next three periods. Assess what the results of the regression equation tells managers and how it is likely to impact de..
What is the cross elasticity of supply : When the price of a box of herbal tea bags rises from $0.99 to $1.21, the quantity offered for sale rises from 400,000 to 600,000. What is the price elasticity of supply? 2. When the price of wheat rises from $2.34 to $2.46, some farmers switch cr..
Why an automaker whose production possibilities frontier : Given the elasticities in question 2. and assuming that higher gasoline taxes would not shift either the SUV supply curve or the hybrid supply curve, a. explain how higher gasoline taxes would affect the equilibrium price and quantity of SUVs. b. e..
What is the smallest number of the remaining : what is the smallest number of the remaining 25 votes that a must recieve to guarentee a winn for a?
Compute the dollar value of the futures contract notional : compute the dollar value of the futures contract notional and the number of contracts to buy/sell for optimal protection
Use the empirical rule to find what two values : Use the Empirical Rule to find what two values 68% of the data will fall between for a data set with a mean of 293 and standard deviation of 19.
Compute the mixed-strategy nash equilbria : In this scenario, the husband and wife want to go to the movies together. The wife wants to see a romance film and the husband wants to see an action movie. Solve for the Nash equilibria to determine the outcome of the game using different strateg..

Reviews

Write a Review

 

Macroeconomics Questions & Answers

  Cowboys games during the 2010 season

Would there be a cost to you to attend the Cowboys' games during the 2010 season and is anything puzzling about Falk's pricing pattern?

  Aztec elasticity of demand for advertising

Aztec depends heavily on advertising to sell its products. Management at Aztec is allowed to spend $2 million monthly on advertising-What is Aztec's elasticity of demand for advertising?

  Assume that the fed reserve adopts an inflation targe

Assume that the Fed Reserve adopts an inflation targe of 3% for its monetary policy.

  How to less the quantity of public goods

Suppose as well, that all voters favoring liberal candidates will vote, while only 50% of those favoring conservative candidates will vote. Create a graph to show how the political equilibrium will differ from an election in which all citizens vot..

  Explain how have these policies affected

Explain how have these policies affected the employment rates for your chosen industry? How have these policies affected the growth of the industry.

  Differentiate the state of the economy

Make an analysis of the United State Fiscal Policy by addressing the following, differentiate the state of the economy. Determine the focus of the current fiscal policy?

  Utility function for consumption and leisure

If the government starts welfare policy which pays B to all non workers and 0 to all workers, at what value of B will Mike opt out of the labor force and go on welfare?

  Explain who are the winners and who are the loosers

Explain who are the winners, who are the loosers, we can better evaluate the net impact, if any, on the overall economy.

  Calculate whether you inflate or deflate the nominal gdp

The following table shows nominal GDP and an appropriate price index for a group of selected years. Compute real GDP, and indicate in each calculation whether you are inflating or deflating the nominal GDP data.

  Illustrate what school of thought would make this suggestion

Illustrate what school of thought would make this suggestion, and how do economists of that school justify that prescription.

  Decision making on sunk costs

Consolidated Drugs, Inc. has spent $4 million developing and testing a new anti-aging drug.  Management now estimates that it will cost $2 million to produce and market this new product.

  Inflation rate and growth rate of real and nominal gdp

Suppose that natural real GDP is constant. For every 1 percent increase in the rate of inflation above its expected level, firms are willing to increase real GDP by 2 percent. Draw the new short-run Phillips Curve.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd