Chapter 2: Q 2.3 (page 27)
Discuss why obtaining increasing increments of any particular good typically entails giving up more and more units of other goods.
Because the to produce any one good we use the resources of the other good.
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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 20 million more tablet devices and moving to production combination F?
Construct a production possibilities curve for a nation facing increasing opportunity costs for producing food and video games. Show how the PPC
changes have given the following events.
(a) A new and better fertilizer is invented.
(b) Immigration occurs, and immigrants’ labor can be 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.
Based on the information provided in Problems 2-6, what is the opportunity cost to this student of allocating enough additional study time on economics to move her grade up from a 90 to a 100?
Senator Borman interjects the following comment after the statements by Senators Creighton and Long reported in Problems 2-10 and 2-11: “In fact, both of my esteemed colleagues are wrong, because an unacceptably large portion of our nation’s resources is currently unemployed.” Of the labeled points on the diagram, which one is consistent with Senator Borman’s position?
Using only the concept of comparative advantage, evaluate this statement: “A professor with a Ph.D. in physics should never mow his or her own lawn, because this would fail to take into account the professor's comparative advantage."
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