Chapter 2: Q. 2.21 (page 47)
Suppose that in Fig 2-2, the nation currently is producing combination D in the table and on the graph of the production possibilities curve. What is the opportunity cost of producing 5 million more smartphones and moving to production combination C?
10 millions per year.
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During a debate on the floor of the U.S. Senate, Senator Creighton states, “Our nation should not devote so many of its fully employed resources to producing capital goods because we already are not producing enough consumption goods for our citizens.” Compared with the other labeled points on the diagram, which one could be consistent with the current product combination choice that Senator Creighton believes the nation has made?
Why might the production possibilities curve relating the number of electronic-gadget-accessory boxes at passenger seats to the quantity of seats on a plane be bowed? Explain your reasoning.
The following table illustrates the points a student can earn on examinations in economics and biology if the student uses all available hours for study. Plot this student’s production possibilities curve. Does the PPC illustrate the law of increasing additional costs?
| Economics | Biology |
| 100 | 40 |
| 90 | 60 |
| 80 | 75 |
| 70 | 85 |
| 60 | 93 |
| 50 | 98 |
| 40 | 100 |
What must be true of the trade-off perceived by people who have multiple sex partners?
Define opportunity cost. What is your opportunity cost of attending a class at 11:00 A.M.? How does it differ from your opportunity cost of attending a class at 8:00 A.M.?
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