48
PART
1
lntroduction
are assignable in MyEconlnb'
Select problems, indicated by a blue
at the back of the book'
Answers to the odd-numbered problems appear
o'otl'.'
Plot this student's production possibilities curve' Does
the PPC illustrate the law of increasing relative cost?
What is the opportunity cost to this student for the additional u.noont of study time on economics required
to move her grade from 60 to 70? From 90 to 100?
opportunity cost. what is your oppoftunity
, /'e$Define
it
'
cost of attending a class at 11:00 'q'u'? How does
class
a
attending
of
cost
oppoftunity
differ from your
at 8:00 a.vI.?
a free ticket to a concert' what' if any,/v @ If you receive
thing, is your opportunity cost of attending the concert? How does your opportunity cost change
/
,i @
9El
if miser-
you
able weather on the night of the concerl requires
greatly
to leave much earlier for the concert hall and
extends the time it takes to get home afterward?
can
The following table illustrates the points a student
if
the
biology
and
earn on examrnations in economics
student uses all available hours for study'
Economics
40
90
50
80
60
70
70
60
80
50
90
40
100
(PPC)
a
ing food and video games' Show how the
PPC
employed in both the agricultural sector and the
video game sector'
c. A new programming language is invented that is
less costly to code and is more memory-efficient'
enabling the use of smaller game cartridges'
d. A heat wave and drought result in a 10 percent decrease in usable farmland'
:-ll.
A nation's residents can allocate thejr scarce resources
either to producing consumption goods or to produc-
/I9
/- -
Plot this student's production possibilities curye' Does
,' the PPC illustrate the law of increasing relative cost?
2-3'
J ttsBased on the information provided in Problem
allocatwhat is the opportunity cost to this student of
ing enough additional study time on economics to
move her grade uP from a 90 to a 100?
,,1@ Consider a change in the table in Problem 2-3' The
student's set of opportunities is now as follows:
Economics
for
Construct a production possibilities curve
producfor
costs
nation facing increasing opportunity
changes given the following events'
a. A new and better fertilizer is invented'
b. Immigration occurs' and immigrants' labor can be
Biology
100
e
ing human capital-that is, providing themselves with
training and education' The following table displar'
the production possibilities for this nation:
Production
Units of
Combination
Consumption
Units of Human
Goods
CaPital
A
0
100
B
10
97
C
20
90
D
30
75
E
40
55
F
50
30
60
0
Ec
a-
Biology
100
40
90
60
BO
75
70
B5
60
93
50
98
40
100
a.
p'rr*
Suppose that the nation's residents currentll'
duce combination A. What is the opporturu$ t::m
of increasing production of consumption goodi m'
10 units? BY 60 units?
b. Does the law of increasing relative
cost hoid
for this nation? WhY or whY not?
9!Fl Lite
-
physical capital, human capital produced ir
pr"r"nt can be applied to the production of
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