Question 1

Table 2.5
  
Table 2.5 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles.
-Refer to Table 2.5. What is Fred's opportunity cost of making a pogo stick?

Accepted Answer

Fred can make 3 unicycles in the same time it takes to make 1 pogo stick. So, the opportunity cost of making 1 pogo stick is 3 unicycles.

Question 2

What is a 'production possibility frontier'? What do points along the frontier represent? What do points inside and outside the frontier represent?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of What is a 'production possibility frontier'? What...

Question 3

'Comparative advantage' means the ability to produce a good or service:

Accepted Answer

Comparative advantage refers to a producer's ability to produce a good or service at a lower opportunity cost than any other producer. This means that the producer can produce a good or service with fewer resources or at a lower cost than other producers, giving them a competitive advantage in the market. It does not necessarily mean that they sell their product at a lower price or higher profit level.

Question 4

Table 2.5
  
Table 2.5 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles.
-Refer to Table 2.5. What is Barney's opportunity cost of making a unicycle?

Accepted Answer

Barney's opportunity cost of making a unicycle is the number of pogo sticks he could have made instead. In this case, if he chooses to make a unicycle, he gives up making 2 pogo sticks (9-7=2). Therefore, the best choice would be for Barney to make pogo sticks as it has a lower opportunity cost.

Question 5

Table 2.4
  
Table 2.4 shows the output per week of two jewellers, Sabrina and Holly. They can either devote their time to making bracelets or making necklaces.
-Refer to Table 2.4. What is Holly's opportunity cost of making a bracelet?

Accepted Answer

To find Holly's opportunity cost of making a bracelet, we need to look at the table and see what she would have produced if she had not made the bracelet. In this case, she would have made 1.2 necklaces instead. Therefore, her opportunity cost of making a bracelet is 1.2 necklaces.

Based on the table, the best choice(s) would depend on the individual's preferences and priorities. Sabrina produces more necklaces per week than bracelets, while Holly produces more bracelets. Therefore, if the jewellers prioritize making more necklaces, they should focus on making necklaces. If they prioritize making more bracelets, they should focus on making bracelets.

Question 6

Table 2.5
  
Table 2.5 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles.
-Refer to Table 2.5. What is Barney's opportunity cost of making a pogo stick?

Accepted Answer

Barney's opportunity cost of making a pogo stick is the amount of unicycles he could have made instead. If the opportunity cost is 1/2 unicycle, it means for every pogo stick made, Barney forgoes making half a unicycle.

Question 7

Table 2.4
  
Table 2.4 shows the output per week of two jewellers, Sabrina and Holly. They can either devote their time to making bracelets or making necklaces.
-Refer to Table 2.4. Which of the following statements is true?

Accepted Answer

The answer of Table 2.4
  
Table 2.4 shows the...

Question 8

What shape does a production possibility frontier take if it displays increasing opportunity costs? What shape does a production possibility frontier take if it displays constant opportunity costs? Which shape is most common in production situations?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of What shape does a production possibility frontier...

Question 9

Table 2.5
  
Table 2.5 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles.
-Refer to Table 2.5. What is Fred's opportunity cost of making a unicycle?

Accepted Answer

Fred's opportunity cost of making a unicycle is 3 pogo sticks (as he could have made 4 pogo sticks instead). Therefore, it is most beneficial for Fred to focus on making pogo sticks, as he has a comparative advantage in producing them. Barney, on the other hand, has a lower opportunity cost for making unicycles (only 1/2 of a pogo stick), so he should focus on making unicycles. This allows both Fred and Barney to specialize in their respective areas of comparative advantage, leading to higher overall production and efficiency.

Question 10

Table 2.4
  
Table 2.4 shows the output per week of two jewellers, Sabrina and Holly. They can either devote their time to making bracelets or making necklaces.
-Refer to Table 2.4. What is Sabrina's opportunity cost of making a necklace?

Accepted Answer

Sabrina's opportunity cost of making a necklace is the amount of bracelets she forgoes. If she gives up 3/4 of a bracelet to make one necklace, then her opportunity cost is 3/4 of a bracelet.

Question 11

Table 2.4
  
Table 2.4 shows the output per week of two jewellers, Sabrina and Holly. They can either devote their time to making bracelets or making necklaces.
-Refer to Table 2-4. What is Holly's opportunity cost of making a necklace?

Accepted Answer

Holly's opportunity cost of making a necklace is the number of bracelets she could have made instead. If she can make 2 necklaces or 1 bracelet, then making 1 necklace costs her 1/2 of a bracelet.

Question 12

Table 2.5
  
Table 2.5 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles.
-Refer to Table 2.5. Which of the following statements is true?

Accepted Answer

The answer of Table 2.5
  
Table 2.5 shows the...

Question 13

On a diagram of a production possibility frontier, economic growth is represented by the slope of the production possibility frontier.

Accepted Answer

Economic growth is represented by an outward shift of the production possibility frontier (PPF), not by the slope of the PPF. The slope represents the opportunity cost of producing one good over another.

Question 14

What is 'economic growth'?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of What is 'economic growth'?
_____________________________________________________________________________________________
_____________________________________________________________________________________________...

Question 15

What is meant by the term 'opportunity cost'?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of What is meant by the term 'opportunity...

Question 16

You have an absolute advantage whenever you:

Accepted Answer

Absolute advantage refers to the ability of an individual, company, or country to produce more of a good or service than competitors, using the same amount of resources.

Question 17

a.Draw a production possibility frontier for a country that produces two goods: beer and pretzels. Assume that resources are equally suited to both tasks.
b.Define opportunity costs.
c.Use your production possibility frontier graph to demonstrate the principle of opportunity costs.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of a.Draw a production possibility frontier for a...

Question 18

Table 2.5
  
Table 2.5 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles.
-Refer to Table 2.5. Which of the following statements is true?

Accepted Answer

To determine comparative advantage we need to look at the opportunity cost of producing each good. The opportunity cost is the amount of one good that must be given up in order to produce one unit of the other good.

For Fred, if he produces one pogo stick, he gives up the opportunity to produce 1/2 of a unicycle (10/20). If he produces one unicycle, he gives up the opportunity to produce 2 pogo sticks (4/2).

For Barney, if he produces one pogo stick, he gives up the opportunity to produce 1/3 of a unicycle (6/18). If he produces one unicycle, he gives up the opportunity to produce 3 pogo sticks (9/3).

Therefore, Barney has a lower opportunity cost for producing unicycles and Fred has a lower opportunity cost for producing pogo sticks. Therefore, Barney has a comparative advantage in producing unicycles and Fred has a comparative advantage in producing pogo sticks.

Question 19

Table 2.4
  
Table 2.4 shows the output per week of two jewellers, Sabrina and Holly. They can either devote their time to making bracelets or making necklaces.
-Refer to Table 2.4. What is Sabrina's opportunity cost of making a bracelet?

Accepted Answer

Opportunity cost is defined as the value of the next best alternative forgone as the result of making a decision. In this case, if Sabrina makes a bracelet, she gives up the opportunity to make 1 1/3 necklaces, which is her opportunity cost.

Question 20

Table 2.4
  
Table 2.4 shows the output per week of two jewellers, Sabrina and Holly. They can either devote their time to making bracelets or making necklaces.
-Refer to Table 2.4. Which of the following statements is true?

Accepted Answer

The answer of Table 2.4
  
Table 2.4 shows the...

Quiz 2: Choices and Trade Offs in the Market

Table 2.5 Table 2.5 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. -Refer to Table 2.5. What is Fred's opportunity cost of making a pogo stick?

What is a 'production possibility frontier'? What do points along the frontier represent? What do points inside and outside the frontier represent? _ _

'Comparative advantage' means the ability to produce a good or service:

Table 2.5 Table 2.5 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. -Refer to Table 2.5. What is Barney's opportunity cost of making a unicycle?

Table 2.4 Table 2.4 shows the output per week of two jewellers, Sabrina and Holly. They can either devote their time to making bracelets or making necklaces. -Refer to Table 2.4. What is Holly's opportunity cost of making a bracelet?

Table 2.5 Table 2.5 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. -Refer to Table 2.5. What is Barney's opportunity cost of making a pogo stick?

Table 2.4 Table 2.4 shows the output per week of two jewellers, Sabrina and Holly. They can either devote their time to making bracelets or making necklaces. -Refer to Table 2.4. Which of the following statements is true?

What shape does a production possibility frontier take if it displays increasing opportunity costs? What shape does a production possibility frontier take if it displays constant opportunity costs? Which shape is most common in production situations? _ _

Table 2.5 Table 2.5 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. -Refer to Table 2.5. What is Fred's opportunity cost of making a unicycle?

Table 2.4 Table 2.4 shows the output per week of two jewellers, Sabrina and Holly. They can either devote their time to making bracelets or making necklaces. -Refer to Table 2.4. What is Sabrina's opportunity cost of making a necklace?

Table 2.4 Table 2.4 shows the output per week of two jewellers, Sabrina and Holly. They can either devote their time to making bracelets or making necklaces. -Refer to Table 2-4. What is Holly's opportunity cost of making a necklace?

Table 2.5 Table 2.5 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. -Refer to Table 2.5. Which of the following statements is true?

On a diagram of a production possibility frontier, economic growth is represented by the slope of the production possibility frontier.

What is 'economic growth'? _ _

What is meant by the term 'opportunity cost'? _ _

You have an absolute advantage whenever you:

a.Draw a production possibility frontier for a country that produces two goods: beer and pretzels. Assume that resources are equally suited to both tasks. b.Define opportunity costs. c.Use your production possibility frontier graph to demonstrate the principle of opportunity costs. _ _

Table 2.5 Table 2.5 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. -Refer to Table 2.5. Which of the following statements is true?

Table 2.4 Table 2.4 shows the output per week of two jewellers, Sabrina and Holly. They can either devote their time to making bracelets or making necklaces. -Refer to Table 2.4. What is Sabrina's opportunity cost of making a bracelet?

Table 2.4 Table 2.4 shows the output per week of two jewellers, Sabrina and Holly. They can either devote their time to making bracelets or making necklaces. -Refer to Table 2.4. Which of the following statements is true?

Quiz 2: Choices and Trade Offs in the Market

Table 2.5 Table 2.5 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. -Refer to Table 2.5. What is Fred's opportunity cost of making a pogo stick?

'Comparative advantage' means the ability to produce a good or service:

Table 2.5 Table 2.5 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. -Refer to Table 2.5. What is Barney's opportunity cost of making a unicycle?

Table 2.4 Table 2.4 shows the output per week of two jewellers, Sabrina and Holly. They can either devote their time to making bracelets or making necklaces. -Refer to Table 2.4. What is Holly's opportunity cost of making a bracelet?

Table 2.5 Table 2.5 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. -Refer to Table 2.5. What is Barney's opportunity cost of making a pogo stick?

Table 2.4 Table 2.4 shows the output per week of two jewellers, Sabrina and Holly. They can either devote their time to making bracelets or making necklaces. -Refer to Table 2.4. Which of the following statements is true?

Table 2.5 Table 2.5 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. -Refer to Table 2.5. What is Fred's opportunity cost of making a unicycle?

Table 2.4 Table 2.4 shows the output per week of two jewellers, Sabrina and Holly. They can either devote their time to making bracelets or making necklaces. -Refer to Table 2.4. What is Sabrina's opportunity cost of making a necklace?

Table 2.4 Table 2.4 shows the output per week of two jewellers, Sabrina and Holly. They can either devote their time to making bracelets or making necklaces. -Refer to Table 2-4. What is Holly's opportunity cost of making a necklace?

Table 2.5 Table 2.5 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. -Refer to Table 2.5. Which of the following statements is true?

On a diagram of a production possibility frontier, economic growth is represented by the slope of the production possibility frontier.

What is 'economic growth'? _____________________________________________________________________________________________ _____________________________________________________________________________________________

What is meant by the term 'opportunity cost'? _____________________________________________________________________________________________ _____________________________________________________________________________________________

You have an absolute advantage whenever you:

Table 2.5 Table 2.5 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. -Refer to Table 2.5. Which of the following statements is true?

Table 2.4 Table 2.4 shows the output per week of two jewellers, Sabrina and Holly. They can either devote their time to making bracelets or making necklaces. -Refer to Table 2.4. What is Sabrina's opportunity cost of making a bracelet?

Table 2.4 Table 2.4 shows the output per week of two jewellers, Sabrina and Holly. They can either devote their time to making bracelets or making necklaces. -Refer to Table 2.4. Which of the following statements is true?

What is 'economic growth'? _ _

What is meant by the term 'opportunity cost'? _ _