Question 1

In the movie A Knight's Tale, three peasants win a jousting tournament and must decide whether they should enjoy most of their winnings now or use most of it for training to improve their future jousting performance. Use appropriate production possibilities frontiers (PPFs) and words to describe the investment trade-off they face.

Accepted Answer

The answer of In the movie A Knight's Tale, three...

Question 2

The table below shows the maximum number of burgers or hot dogs that Vinny and The Situation can cook in 1 hour.
a. Fill in the rest of the table with the opportunity cost of burgers and hot dogs for each person. Be sure to include the units.
b. Identify who has a comparative advantage in producing each good. $$\begin{array} { | l | l | l | l | l | } 
\hline & \begin{array} { l } 
\text { Maximum } \
\text { Burgers }
\end{array} & \begin{array} { l } 
\text { Maximum } \
\text { Hot Dogs }
\end{array} & \begin{array} { l } 
\text { Opportunity } \
\text { Cost of 1 } \
\text { Burger }
\end{array} & \begin{array} { l } 
\text { Opportunity } \
\text { Cost of 1 Hot } \
\text { Dog }
\end{array} \
\hline \text { Vinuy } & 30 & 60 & & \
\hline \begin{array} { l } 
\text { The } \
\text { Situation }
\end{array} & 50 & 75 & & \
\hline
\end{array}$$

Accepted Answer

The answer of The table below shows the maximum number...

Question 3

How can a person who is "better" or more efficient (in that they have an absolute advantage in the production of various goods on the PPF) at producing several things be made even better off by specialization and trade?

Accepted Answer

The answer of How can a person who is "better"...

Question 4

Why doesn't our society invest more resources into the production of capital goods to enhance the level of growth in our future production possibilities frontier (PPF)?

Accepted Answer

The answer of Why doesn't our society invest more resources...

Question 5

Why might Shaquille O'Neal, a 7'1" former National Basketball Association (NBA) player, hire professional movers to help him move, even though his size and strength likely make him more proficient (better) at furniture moving than the professionals he may hire?

Accepted Answer

The answer of Why might Shaquille O'Neal, a 7'1" former...

Question 6

The existing entries in the following table show the maximum quantities of milk shakes or fruit smoothies the college president and dining hall staffer could make during an afternoon shift, given a fixed amount of resources.
a. Fill in the remaining part of the table (be sure to label the units) and answer the questions below. $$\begin{array} { | l | l | l | l | l | } 
\hline & \begin{array} { l } 
\text { Number of } \
\text { Milk } \
\text { Shakes per } \
\text { Shift }
\end{array} & \begin{array} { l } 
\text { Number of } \
\text { Simoothies }
\end{array} & \begin{array} { l } 
\text { Opportunity } \
\text { Cost of 1 } \
\text { Simoothie }
\end{array} & \begin{array} { l } 
\text { Opportunity } \
\text { Cost of 1 Milk } \
\text { Slake }
\end{array} \
\hline \text { President } & 50 & 25 & & \
\hline \begin{array} { l } 
\text { Dining Hall } \
\text { Staffer }
\end{array} & 90 & 30 & & \
\hline
\end{array}$$ 
b. Who has a comparative advantage in producing smoothies?
c. Who has an absolute advantage in producing milk shakes?

Accepted Answer

The answer of The existing entries in the following table...

Question 7

Is it always better to forgo current consumption in order to invest more in capital goods that will provide more growth in society's production possibilities frontier (PPF) and make us better off in the future?

Accepted Answer

The answer of Is it always better to forgo current...

Question 8

You are planning to add new mulch to all the landscaping beds around your house. You have determined the quantity of mulch you will need and have identified these two options for getting the mulch to your house:
 1. You can have all the mulch delivered to your yard in one dump truck for $450.
 2. You can make four trips to the garden center with your pickup truck and haul it yourself. It will cost you $75 per load for the mulch, plus $25 in fuel and truck wear per load. You estimate it will take about five hours to haul and unload all four loads.
What is the full cost of each method? Which method is cheaper? How is opportunity cost relevant?

Accepted Answer

The answer of You are planning to add new mulch...

Question 9

Draw a production possibilities frontier (PPF) that shows a pizza shop's production trade-offs between producing pizzas and stromboli. Suppose the pizza shop upgrades to a larger, more-automated oven. On the same graph, show how the PPF changes. (The oven is used to bake both pizzas and stromboli.)

Accepted Answer

The answer of Draw a production possibilities frontier (PPF) that...

Quiz 2: Model Building and Gains From Trade

How can a person who is "better" or more efficient (in that they have an absolute advantage in the production of various goods on the PPF) at producing several things be made even better off by specialization and trade?

Why doesn't our society invest more resources into the production of capital goods to enhance the level of growth in our future production possibilities frontier (PPF)?

Why might Shaquille O'Neal, a 7'1" former National Basketball Association (NBA) player, hire professional movers to help him move, even though his size and strength likely make him more proficient (better) at furniture moving than the professionals he may hire?

Is it always better to forgo current consumption in order to invest more in capital goods that will provide more growth in society's production possibilities frontier (PPF) and make us better off in the future?

Draw a production possibilities frontier (PPF) that shows a pizza shop's production trade-offs between producing pizzas and stromboli. Suppose the pizza shop upgrades to a larger, more-automated oven. On the same graph, show how the PPF changes. (The oven is used to bake both pizzas and stromboli.)