various intermediate quantities, Microeconomics

An economy can produce a maximum of either 28 million tons of wheat or 7,000 automobiles,
or various intermediate quantities, as depicted in the table below:

Wheat (millions of tons)
A28 ,B 7,C25,D 22,E 18,F 13,G 7,H 0
Automobiles (thousands of units)
A0,B1,C 2,D 3,E 4,F 5,G 6,H 7
a. Plot the data from the table on a graph, with wheat on the vertical axis and
automobiles on the horizontal axis.
b. Can this economy simultaneously produce 3,000 automobiles and 15 million tons of
wheat? Explain. Where would this point lie relative to the PPF?
c. Can this economy simultaneously produce 2,000 automobiles and 27 million tons of
wheat? Explain. Where would this point lie relative to the PPF?
d. Add a new row to the table listing the opportunity cost of producing the 1st through
the 7th automobiles. In what units is this opportunity cost measured?
e. What is the relationship between the opportunity costs you just calculated and the
slopes of the PPF graph?
f. Now consider if instead the economy decided to produce additional units of wheat and
fewer automobiles. In particular, consider if the economy moved from D to C. What is
the relationship between the opportunity cost of this move and the slope of the graph
connecting points C and D?
g. Can you explain why the opportunity cost of moving from point C to D is not the same
as the opportunity cost of moving from B to C? In particular, why is the opportunity
cost of moving from C to D higher than the opportunity cost of moving from B to C?
h. An alternative shape used to draw PPFs is simply a straight line. What underlying
assumption is reflected in a straightline PPF?
Posted Date: 11/8/2012 10:33:22 PM | Location : United States

Related Discussions:- various intermediate quantities, Assignment Help, Ask Question on various intermediate quantities, Get Answer, Expert's Help, various intermediate quantities Discussions

Write discussion on various intermediate quantities
Your posts are moderated
Related Questions
Air is one of the important constituent in the environment that is prone to pollution. Pollution of air refers to that part of atmosphere which is very nearest to the earth’s surf

Explain about the term cost function. Cost Functions This function measures the minimum cost of producing a specified level of output for some fixed factor prices. Likewise

Determinants of Short Run Cost - The relationship among the production function and cost can be exemplified by either increasing returns and cost or decreasing returns and cost

Explain the factors which would affect the price of a good. As there is a very long list of determinants, the basic issue is for the student to describe and illustrate how shif

Profit maximization is theoretically the most sound but practically unattainable objective of business firms. In the light of this statement critically appraise the Baumol’s sales

Discuss the impact of rational self-interest on each of the following decisions

The following hypotheses are concerned with the general impact of FDI from Costa Rica trading partners on exports from the technology sector:  H1:   There is a positive signifi

Two firms produce a pollutant called Q. The total costs of reducing emissions of Q are as follows for Firm 1 and Firm 2, respectively: TC1=10+100Q12 TC2=20 + 50Q22. This means tha

Environmental economics goes back to the 19th century. Economists who research the planet are mainly worried with the idea of externalities, rare organic sources, and with the pro

Fixed input and variable input: A fixed input is that input whose quantity cannot be varied in the short-run when demand conditions require an increase or a decrease in produc