MACROECONOMICS FOR TODAY 5TH EDITION PDF, EPUB, EBOOK

Irvin B Tucker | --- | --- | --- | 9780324407990 | --- | --- for Today, by Tucker, 5th Edition | | Bookbyte

You have successfully signed out and will be required to sign back in should you need to download more resources. This title is out of print. Paul G. Keat, Thunderbird Philip K. Young, Thunderbird. Availability This title is out of print. Description For managerial courses taught in business schools and economics departments. Example: An index of these modules can be found on the inside cover of each student text. Example: pp. Similar examples at the end of every chapter. Select only the chapters you require or supplement with recommended case studies all under one cover. New to This Edition. Table of Contents 1. Share a link to All Resources. Instructor Resources. Websites and online courses. Other Student Resources. Previous editions. Sign In We're sorry! Specialization of labor typically leads to higher levels of productive inefficiency in an . The world's total output will be greater the more self-sufficient each of the world's becomes. All of the following, except one, help explain why specialization leads to greater production than is otherwise possible. It allows the organization of production in business firms. Specialization reduces the time lost in moving from one activity to another. As workers repeat an activity over and over, they hone their skills and become more expert. Specialization allows workers to be assigned to the activities for which they have the greater natural ability. The more often workers repeat an activity, the more stimulating and enjoyable they find it. The specialization of labor a. The principle of specialization and exchange implies that a. Specialization leads to greater production than is otherwise possible a. Specialization and exchange result in a. If Alicia limits the range of her productive activities rather than trying to be self- sufficient, she is engaging in a. Molly needs 30 minutes to wash the car and 45 minutes to mow the lawn. Renee needs 1 hour to wash the car and 2 hours to mow the lawn. Which of the following statements is correct? Molly should specialize in both tasks. Renee should specialize in both tasks. Each woman should specialize in the task in which she has the absolute advantage. Absolute advantage is not an appropriate guide for determining specialization. Neither woman should specialize. Which of the following best defines the specialization of resources? Workers are compensated as individuals. Special resources are needed to produce most goods. Each resource in paid for in full. Each resource is paid the most if it is specialized. Each resource is focused on a limited number of productive activities. Economies organize according to the principle of specialization and exchange because doing so a. If Indiana has an absolute advantage over Maine in producing both corn and ball bearings, then a. Indiana should produce both corn and ball bearings b. Maine should produce ball bearings and Indiana should produce corn d. Indiana should produce ball bearings and Maine should produce corn e. Specialization and exchange a. Suppose that the United States has an absolute advantage over Mexico in producing both agricultural and manufactured goods. In the U. In Mexico, the opportunity cost of 1 unit of agricultural output is 1. Total production in the U. Mexico specializes in both types of output c. One kind of gain from specialization is that a. If Bob has an absolute advantage over Pete in both typing and woodworking, then Bob also has a comparative advantage over Pete in both activities. According to the law of comparative advantage, individuals and economies should specialize in producing those goods and services in which they have a comparative advantage. False ANS: A. Sven has a comparative advantage over Alice in cooking but not in doing the laundry. Which of the following must be true? Sven must have an absolute advantage in both cooking and doing the laundry. Sven has a lower opportunity cost in doing the laundry. Sven has an absolute advantage in doing the laundry. Alice must have an absolute advantage in cooking. Sven must have a lower opportunity cost than Alice for cooking. Bill can cook dinner in 45 minutes and mow the lawn in 1. Eileen can cook dinner in 1. Bill has both an absolute advantage and a comparative advantage in cooking dinner. Bill has both an absolute advantage and a comparative advantage in mowing the lawn. Eileen has both an absolute advantage and a comparative advantage in cooking dinner. Eileen has both an absolute advantage and a comparative advantage in mowing the lawn. Bill has the comparative advantage in both cooking dinner and mowing the lawn. Bill should specialize in both tasks. Bill should specialize in cooking dinner; Eileen should specialize in mowing the lawn. Bill should specialize in mowing the lawn; Eileen should specialize in cooking dinner. Eileen should specialize in both tasks. Bill's opportunity cost of mowing the lawn is a. Jenni can change a car's oil in 10 minutes and clean a bathroom in 20 minutes. Rob can change a car's oil in 20 minutes and clean a bathroom in 10 minutes. Therefore, a. Jenni should clean the bathroom and Rob should change the car's oil b. Rob should clean the bathroom and Jenni should change the car's oil c. Rob has an absolute advantage in both activities e. If Arthur has a comparative advantage in sewing and Susan has a comparative advantage in accounting, then a. Arthur must have an absolute advantage in sewing b. Arthur must have an absolute advantage in accounting c. Susan must have an absolute advantage in sewing d. Using the information in Figure , Jill's opportunity cost of fetching each additional pail is a. According to the information in Figure , a. Jill has an absolute advantage in fetching pails b. Jill has an absolute advantage in sawing boards c. Jill has a comparative advantage in sawing boards d. Jack has a comparative advantage in sawing boards e. According to the information in Figure , Jill's opportunity cost of sawing a board is a. Suppose Bob and Tom are writing jokes for a their new TV show. Suppose there are two types of jokes, political jokes and jokes about celebrities. The number of jokes that can be produced by each person in each category are listed in Figure From this table they should a. From this table you can tell that a. Bob has an absolute advantage in both political and celebrity jokes b. Tom has an absolute advantage in both political and celebrity jokes c. Bob has an comparative advantage in both political and celebrity jokes d. Tom has an comparative advantage in both political and celebrity jokes e. Tom has an absolute advantage in both political and celebrity jokes but a comparative advantage in political jokes only c. Bob has an comparative advantage in both political and celebrity jokes. The principle of comparative advantage states that a. Maximizing output by following the principle of comparative advantage requires a. The principle of comparative advantage says that a. When individuals concentrate on a limited number of productive activities, this is known as a. If Japan could produce more steel in a year than the United States using the same amount of resources, then a. Japan must have an absolute advantage in producing steel b. Japan must have a comparative advantage in producing steel d. If Pat can produce a good or service at a lower opportunity cost than Chris can, then a. Pat has a comparative advantage in producing the good or service b. Pat must have an absolute advantage in producing the good or service d. Pat must be more talented than Chris e. Molly has an absolute advantage in washing the car; Renee has an absolute advantage in mowing the lawn. Molly has an absolute advantage in mowing the lawn; Renee has an absolute advantage in washing the car. Molly has an absolute advantage in both tasks. Renee has an absolute advantage in both tasks. Neither woman has an absolute advantage in washing the car. If Chris can produce a service using fewer resources than Pat would, then Chris a. If Mary has an absolute advantage over Bill in performing each of two tasks, then a. Mary must have a comparative advantage in both tasks b. Mary cannot benefit by specializing in one and trading with Bill for the other c. Mary should specialize in both tasks d. Mary cannot have a comparative advantage in either task e. A person has an absolute advantage in producing a good if he can a. Every requires a means for determining resource allocation. In deciding where to operate along its production possibilities frontier, a society is answering the question of a. If the U. If the Ford Motor Company decides to use more robots in its manufacturing plants, the company is addressing the question of a. In deciding to produce more agricultural goods and fewer manufactured goods, a society is addressing the question of a. The three problems of resource allocation are faced by a. A method of allocating scarce resources is a necessary component of a. In a economy, most of what we consume is obtained by a. In a market system, resources are allocated by a. Under a socialist system, a. The three primary systems for allocating resources are a. Traditional economies tend to be a. An economy with a government planning commission that provides explicit instructions for resource allocation is an example of a. Under a market system of resource allocation, the most important limitations on individual freedom of action are imposed by a. Under a market system of resource allocation a. A weakness of the market system of resource allocation is that a. The system of resource allocation in the United States is a a. Solutions for Principles of Economics by Gregory …

Connect with us to learn more. We're sorry! We don't recognize your username or password. Please try again. The work is protected by local and international copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. You have successfully signed out and will be required to sign back in should you need to download more resources. This title is out of print. Paul G. Keat, Thunderbird Philip K. Young, Thunderbird. Availability This title is out of print. Description For courses taught in business schools and economics departments. Example: An index of these modules can be found on the inside cover of each student text. Example: pp. Similar examples at the end of every chapter. Select only the chapters you require or supplement with recommended case studies all under one cover. New to This Edition. Table of Contents 1. Share a link to All Resources. The production possibility curve is bowed outward from the origin because of: A the law of increasing opportunity costs. B the finite nature of the resource base. When the production possibilities curve is bowed out, resources are: A equally well-suited to production of both goods. B not being used efficiently. C not equally suited to the production of both types of goods. D of an inferior quality. The production possibility curve is bowed outward from the origin because of: A the law of decreasing opportunity costs. D the changes in the opportunity cost due to different efficiencies of the same resource in. ANS: D portunity costs. The production possibilities curve is: A convex to the origin and bowed inwards. B concave to the origin and bowed outwards. C bowed inwards. D convex to the origin and bowed outwards. According to the data given in Exhibit 2. B may be a result of unemployment. C may be a result of unused natural resources. D is impossible. According to the data in Exhibit 2. D result in underemployment. B the quantity of consumer goods is constant for each change in the quantity of capital. C greater amounts of capital goods must be sacrificed to produce each additional unit of. D the amount of consumer goods produced must be greater than zero. For the economy shown in Exhibit 2. A Not enough grain is being produced. B There must be resources that are not being used fully. C If the economy reallocates resources from A to D, it has to sacrifice some car production. D Increased grain production would be impossible. B use its given resources more efficiently than it would at point A. C experience underemployment. As shown in Exhibit 2. C the result of complete specialisation in consumer goods production. D unobtainable in this economy. C unobtainable in this economy. C it gains extra units of consumer goods but has to sacrifice units of capital goods. D it gains extra units of consumer goods without sacrificing units of capital goods. Which of the following moves from one point to another in Exhibit 2. Movement along the production possibilities curve shown in Exhibit 2. B The law of declining opportunity costs. C all inputs are homogeneous including labour. D that not all resources are utilised. Unattainable combination Z shown in Exhibit 2. B can be achieved by using more of the existing resources. C will never be achieved. D can easily be achieved by having full employment. Suppose an economy is faced with the production possibilities table shown in Exhibit 2. A increase; the production possibility table shows only the maximum efficiency points. B increase; of the law of increasing costs. C decrease; of the law of decreasing costs. D decrease; of the limited resource base. B 25; C 23; D 1; A decreases; greater efficiency in production. B increases; decreasing opportunity cost. C increases; the law of increasing costs. D increases; greater efficiency in production. Law of increasing opportunity cost states: A that opportunity cost decreases as production of one output expands. B the production possibilities frontier bows outwards. C that the stock of technology is increasing. D the production possibilities frontier bows inwards. ANS: B portunity costs. B point A is preferred to point E. C point A is preferred to point D. D point B is preferred to point A. E point B is preferred to point C. B the maximum number of consumption goods is being produced. C the economy has not achieved full employment. D the economy could not survive because no food is being produced. E the economy has not achieved maximum efficiency. Point H: A cannot be achieved by this economy today. B could be achieved today only if the economy achieved full employment. D could be achieved in the future by an advancement in technology. E could be achieved in the future by growth in the economy. From the information in Exhibit 2. B would be two units of capital goods. C would be zero. D would be five units of capital goods. E cannot be estimated. The economy experiences if: A the resource base decreases. B the production possibilities frontier shifts inwards. C the number of workers decreases. D the production possibilities frontier shifts outwards. Compare two economies A and B that start out with identical production possibilities curves. Economy A chooses an efficient point with six consumption goods and three capital goods, while economy B chooses an efficient point with four consumption goods and five capital goods. In the future we can predict: A economy A will operate inefficiently. B economy B will operate inefficiently. C economy B will grow faster than economy A. D economy A will grow faster than economy B. ANS: C sibilities frontier. An analysis of production possibilities curves indicates that the reason why underdeveloped nations have difficulties increasing their economic growth rates is because: A low population growth rates mean fewer workers to produce food and other necessities. B their production possibilities curves shift in when resources are increased. C their production possibilities curves are positively sloped, unlike those in more developed. D they must cut back their already meagre consumption levels to increase capital. ANS: D sibilities frontier. People in poor countries may have difficulties achieving economic growth because: A their production possibilities curves slope upward instead of downward. B they must cut back on current consumption to increase capital goods. C they have a solid consumption base already in place. D their resource bases are fully developed. ANS: B sibilities frontier. Technological innovations will cause: A the production possibilities curve to stay the same. B the production possibilities curve to shift to the left. C the production possibilities curve to shift to the right. B a decrease in the ability to produce goods in the next period. C a decrease in economic growth in future periods. D an increase in economic growth in future periods. B movement down along the curve. C movement up along the curve. D inward shift of the entire curve. Which would be least likely to cause the production possibilities curve to shift to the right? A An increase in the labour force. B Improved methods of production. C An increase in the education and training of the labour force. D A decrease in unemployment. Which of the following would most likely cause the production possibilities curve for cars and bread to shift outward? A A choice of more bread and more cars. B A choice of more bread and fewer cars. C A choice of more cars and less bread. D An increase in the workforce level. In order for an economy to shift its production possibilities curve rightward, it must: A utilise all existing resources. B reduce expenditure on research and development. C increase the unemployment rate. D experience an improvement in its technology. The production possibilities curve for the nation of Economania shifts to the right. C high unemployment in Economania for the previous time period. The production possibilities curve for the nation of Economagic shifts to the left. B innovation in the production of goods in Economagic. B does not cause a shift in the production possibilities curve. C causes an outward shift in the production possibilities curve. D causes a movement along the production possibilities curve. Suppose a new method is discovered that allows the production of more grapes for the given level of inputs. Assume that this method cannot be used in car production. What will be the impact on the production possibilities curve? The production possibilities curve will: A shift to the right. B pivot outward as car production remains unchanged. C shift to the left for car production. D not change. ANS: B sibilities frontier Government supports research and development programs because: A research and development programs create employment. B research and development programs support academics. C research and development might pull the production possibilities frontier in. D research and development might lead to innovations and more effective ways of using. Which of the following would most likely cause the production possibilities curve for DVD players and food to shift outward? A A choice of more food and more DVD players. B A choice of more food and fewer DVD players. C A choice of more DVD players and less food. D An increase in the quantity of natural resources. In order for an economy to shift its production possibilities curve rightward, it must: A increase the rate of unemployment. B attract more workers to the country. C use its resources more efficiently. D spend less on research and development. Narrbegin In a country, in Exhibit 2. In this same country is located at point B on its production possibility curve. Which of the following could have brought about this shift in production possibilities curves? A More efficient production in B A natural disaster in which leads to a destruction of resources. C Higher unemployment in D An advance in technology occurring in Suppose this country was located at point A in and point B in This economy: A is worse off in than in B has stagnated production in this two-year period. C is more efficient in than in D has shown growth between these two years. B outward shift of a production possibilities curve. C movement along a production possibilities curve. D production possibilities curve that remains fixed. Which of the following statements is false? A Marginal analysis is an examination of the effects of additions or subtractions from a. B The production possibilities curve shows the unattainable combination of two outputs. C Technology is the body of knowledge and skills applied to how goods are produced. D Economic growth is illustrated as an outward shift of the production possibilities curve. B investment in research and development. C resource renewal. D out-resourcing. The process of accumulating capital is called: A capitalisation. B loanable funds. C investment. A nation can accelerate its economic growth by: A reducing the number of immigrants allowed into the country. B increasing its total investment level. C printing more money. D imposing tariffs and quotas on imported goods. The rate of future economic growth will be greater if: A the economy is focused on the production of capital goods. B the existing resources are employed in the production of consumer goods rather than. C the existing resources are employed equally in the production of consumer goods and. D the existing resources are saved for later use. The production of capital goods will: A increase the present productive capacity of the economy. B increase the future productive capacity of the economy. C promote future economic growth. D not change the future productive capacity of the economy. The theory of comparative advantage: A helps to analyse the absolute advantages of countries involved. B suggests that a country that does not have an absolute advantage should import every. C analyses the basis of trade where an individual nation can gain from such trade. D suggests that a country specialise in producing goods or services for which it has a higher. Assume Australia can use a given amount of its resources to produce either 20 caravans or eight automobiles and Japan can employ the same amount of its resources to produce either 20 caravans or 10 automobiles. Australia should specialise in: A caravans. B automobiles. C both goods. D neither good. According to the principle of comparative advantage, total output and consumption levels will be highest when goods are produced in nations according to which of the following conditions? A Opportunity costs are lowest. B Absolute advantages are highest. C Opportunity costs are equal. D Absolute advantages are lowest. Which of the following statements is true? A Free trade theory suggests that when trade takes place any gains made by one nation. B If a hairdresser has a comparative advantage over the cleaner, she should do both: cutting. C According to the theory of comparative advantage, a nation should specialise in the pro. D Specialisation allows nations to trade the surplus of their production. ANS: D. Suppose rice can be produced in country X at a lower cost than in country Y, while tuna can be produced in country Y at a lower cost than in country X. International competition will: A destroy the rice market in both countries. B drive X to specialise in rice and Y to specialise in tuna. C drive Y to specialise in rice and X to specialise in tuna. D cause both X and Y to reject international specialisation. If a country has a comparative advantage in the production of all goods, it should: A specialise in the production of goods with the lowest opportunity cost. B specialise in the production of goods with the highest opportunity cost. C specialise in the production of goods with the absolute advantage. D specialise in the production of goods without the absolute advantage. If Japan gives up 10 bushels of rice to produce one bicycle, while Australia gives up five bushels of rice to produce one bicycle, then: A the opportunity cost of producing bicycles in Australia is higher than in Japan. B Japan has a comparative advantage in the production of bicycles. Introduction to economics (video) | Scarcity | Khan Academy

The production possibilities curve will: A shift to the right. B pivot outward as car production remains unchanged. C shift to the left for car production. D not change. ANS: B sibilities frontier Government supports research and development programs because: A research and development programs create employment. B research and development programs support academics. C research and development might pull the production possibilities frontier in. D research and development might lead to innovations and more effective ways of using. Which of the following would most likely cause the production possibilities curve for DVD players and food to shift outward? A A choice of more food and more DVD players. B A choice of more food and fewer DVD players. C A choice of more DVD players and less food. D An increase in the quantity of natural resources. In order for an economy to shift its production possibilities curve rightward, it must: A increase the rate of unemployment. B attract more workers to the country. C use its resources more efficiently. D spend less on research and development. Narrbegin In a country, in Exhibit 2. In this same country is located at point B on its production possibility curve. Which of the following could have brought about this shift in production possibilities curves? A More efficient production in B A natural disaster in which leads to a destruction of resources. C Higher unemployment in D An advance in technology occurring in Suppose this country was located at point A in and point B in This economy: A is worse off in than in B has stagnated production in this two-year period. C is more efficient in than in D has shown growth between these two years. B outward shift of a production possibilities curve. C movement along a production possibilities curve. D production possibilities curve that remains fixed. Which of the following statements is false? A Marginal analysis is an examination of the effects of additions or subtractions from a. B The production possibilities curve shows the unattainable combination of two outputs. C Technology is the body of knowledge and skills applied to how goods are produced. D Economic growth is illustrated as an outward shift of the production possibilities curve. B investment in research and development. C resource renewal. D out-resourcing. The process of accumulating capital is called: A capitalisation. B loanable funds. C investment. A nation can accelerate its economic growth by: A reducing the number of immigrants allowed into the country. B increasing its total investment level. C printing more money. D imposing tariffs and quotas on imported goods. The rate of future economic growth will be greater if: A the economy is focused on the production of capital goods. B the existing resources are employed in the production of consumer goods rather than. C the existing resources are employed equally in the production of consumer goods and. D the existing resources are saved for later use. The production of capital goods will: A increase the present productive capacity of the economy. B increase the future productive capacity of the economy. C promote future economic growth. D not change the future productive capacity of the economy. The theory of comparative advantage: A helps to analyse the absolute advantages of countries involved. B suggests that a country that does not have an absolute advantage should import every. C analyses the basis of trade where an individual nation can gain from such trade. D suggests that a country specialise in producing goods or services for which it has a higher. Assume Australia can use a given amount of its resources to produce either 20 caravans or eight automobiles and Japan can employ the same amount of its resources to produce either 20 caravans or 10 automobiles. Australia should specialise in: A caravans. B automobiles. C both goods. D neither good. According to the principle of comparative advantage, total output and consumption levels will be highest when goods are produced in nations according to which of the following conditions? A Opportunity costs are lowest. B Absolute advantages are highest. C Opportunity costs are equal. D Absolute advantages are lowest. Which of the following statements is true? A Free trade theory suggests that when trade takes place any gains made by one nation. B If a hairdresser has a comparative advantage over the cleaner, she should do both: cutting. C According to the theory of comparative advantage, a nation should specialise in the pro. D Specialisation allows nations to trade the surplus of their production. ANS: D. Suppose rice can be produced in country X at a lower cost than in country Y, while tuna can be produced in country Y at a lower cost than in country X. International competition will: A destroy the rice market in both countries. B drive X to specialise in rice and Y to specialise in tuna. C drive Y to specialise in rice and X to specialise in tuna. D cause both X and Y to reject international specialisation. If a country has a comparative advantage in the production of all goods, it should: A specialise in the production of goods with the lowest opportunity cost. B specialise in the production of goods with the highest opportunity cost. C specialise in the production of goods with the absolute advantage. D specialise in the production of goods without the absolute advantage. If Japan gives up 10 bushels of rice to produce one bicycle, while Australia gives up five bushels of rice to produce one bicycle, then: A the opportunity cost of producing bicycles in Australia is higher than in Japan. B Japan has a comparative advantage in the production of bicycles. C total output will be highest if Japan specialises in rice and Australia specialises. D total output will be highest if Australia specialises in rice and Japan specialises. Suppose that Spain has a comparative advantage in hats and Portugal has a comparative advantage in doormats. Under a system of free trade, each country specialises and then trades with the other. If the price starts at four hats per doormat, and then increases to five hats per doormat, then: A people in Portugal will not want to buy as many hats. B Spain no longer has a comparative advantage in hats. C Portugal is flooding the market with too many doormats. D some of the gains from trade shift to Portugal. The theory of comparative advantage suggests: A that an industrialised country should only export. B that a country that is not competitive should import everything. C that a country should trade based on its comparative advantage. D that one country exploits another country. Increased productivity leads to: A less efficient use of resources. B greater variety of goods and services at lower prices. C decreased standard of living for the population. D less variety of goods and services at higher prices. What are the advantages of specialisation? A Decreased skills of workers. B More time spent on the performance of each task. C Training is easier to perform. D Higher unemployment. Which of the following arguments are made in support of immigration? A It helps developing countries to achieve a higher PPF. C People bring their assets with them, thereby decreasing investment. D Immigration should not be supported. B 7 million. C 10 million. D 13 million. The argument for an increase in skilled and business migration is based on which of the following? A It would not only increase the labour supply, but unemployment as well. B It will shift the PPF curve to the left due to the burden these people will place on our. C It will shift the PPF curve to the right through increases in skilled labour and technology. When making a rational decision which requires the consideration of costs and benefits involved, the opportunity cost of a decision is always taken into consideration. ANS: F. An opportunity cost is the total cost of all other alternatives foregone whenever one chooses an alternative. The opportunity cost of good A has increased, as resources that are shifted from the production of good B to good A are less efficient in the production of good A. ANS: T. If more of one good can be produced without producing less of another output, the economy must have been operating efficiently. ANS: F frontier. For the economy to operate efficiently, it must shift workers from producing consumer goods to producing capital goods. The most efficient point on the production possibilities curve is the midpoint on the curve. The production possibility curve illustrates the important economic concept of opportunity cost. ANS: T frontier. ANS: F sibilities frontier. Assuming an economy is already experiencing full employment, then it must produce more consumer goods and fewer capital goods if it wishes to experience greater rates of economic growth over time. In order to achieve economic growth, investment in capital accumulation is more important than investment in education and other labour productivity enhancing programs. An increase in current consumption is necessary for economic growth. A country has a comparative advantage in producing a good when it has the lowest opportunity cost of producing that good. This sample only, Download all chapters at: alibabadownload. REF: Marginal analysis. REF: The production possibilities. REF: The law of increasing op-. REF: Shifting the production pos- D an economy to operate below its production possibilities curve. Economic growth: A causes an inward shift in the production possibilities curve. REF: Shifting the production pos- B does not cause a shift in the production possibilities curve. REF: Present investment and fu- D debt management. Karleigh Ayers. Published on Apr 6, Time is a good example for this: if you choose to sleep longer when the next most pressing preferred thing to do was to finish some tutorial exercises rather than go out for breakfast or go running or It is not about whether to study or not, it is about whether to study for one more hour. Point out, however, that the benefits and costs of a decision are not always clear. Moreover, they may not be easily measured or quantified. Instead, they will often have to be subjectively estimated. Therefore, what may appear as rational to one person may not appear as rational to someone else because of the different subjective estimates of benefits and costs. This may seem too simplistic, but remind them that this is about the model being simple. It can demonstrate a situation where all the resources are being used and it is not possible to produce more of one output without having less of the other. The goal for any nation, then, is to attempt to produce on its production possibilities frontier to maximise production given their limited resources. To do so requires employing all their resources. This is why full employment is a universal national economic macroeconomic goal. Because full employment is illustrated as a point on the frontier, all nations attempt to be on their production possibilities frontier. Note that this is not saying any one point on the PPF is necessarily better than another more on that later as any point on the PPF is using all the resources. Make sure students can see why such a point is inefficient: it is possible to attain more output of one without less of the other. That is, point out that given the assumptions, any point outside is unattainable, but at another time, if changes have taken place with resources or technology, then more can be produced. Make sure that the students know how to draw the PPF and explain what the points mean. A consultancy firm, Montana International Safety Consultancy, gives an example of how they use the PPF in their analysis of processes and procedures. Its main function is enabling companies to compare their potential performance with their actual performance. Thus, the identification of areas with a lack of control or that are of substandard performance takes place. Start with the textbook example of an economy producing motor cars or university degrees. According to what we know about opportunity cost, this means that the next best alternative to motor cars for this economy is university degrees, and motor cars are the next best alternative to university degrees. Using the model, the overall opportunity cost, so to speak, is obvious — if the economy chooses the point where only cars are produced, the opportunity cost is the degrees foregone. From here, though, it can be seen that to choose some of the next best alternative means less of the best. Do the sums with them, using the diagram or the schedule so that they can see, both ways, that the costs are increasing. Then explain why the costs are increasing. Are the resources going to be equally suited for producing either product; e. Consumer products satisfy our wants directly and in the present. Capital products satisfy our wants indirectly and in the future. It may appear tempting to produce a lot of consumer products now because this will satisfy us more now. However, the opportunity cost is less of the capital goods production that is necessary for future growth. Explain that investment in capital goods will increase future production possibilities because workers are more productive the more plant and equipment they have to work with. Therefore, if more consumer goods are produced now, it will be at the expense of not so many being produced later on. In essence, our present location on the production possibilities curve will determine the future location of the curve. Moreover, emphasise that economic growth is another one of the three major macroeconomic goals. But, higher standards of living require the sacrifice of current consumption in order to free up resources to be devoted to the production of capital products. We need less consumption and more investment for greater growth and higher standards of living. In such an instance, these instructors should cover Chapter 18, Section 2, which covers this topic. Immigrants bring other resources, including financial capital and increased labour skills. These labour skills may promote technological change, which leads to more efficient use of equipment, which in turn increases the production level; thus shifting the PPF outwards. For the natural environment, though, there will be challenges in accommodating the extra people. Larger populations need more accommodation, transport, utilities and other services, which means more demands on land, water, oil etc. These effects were discussed by a colloquium on two reports commissioned by the Federal government into on the long-term effects of net overseas migration, though the authors noted this is a complex issue. Loss of these resources will result in the PPF shifting inwards. War and political instability have similar impacts. The effect on the natural environment, though, could be positive to the extent that the pressures described in 3 above would be lessened. However, in the long term, if a period of paid parental leave gives parents the opportunity to spend time with their children when they are younger, they may be more likely to enter the workforce full time when their children enter school. Parents would be able to take the parental leave when they need it, while retaining their full time employment, rather than having to take casual or part time jobs to accommodate the demands of raising children and working, or leaving the workforce Good A Good B Effects of immigration PPF1 PPF2 7. As an example, the Scandinavian countries have some of the most generous paid parental leave policies in the world, and they also have some of the highest rates of female workforce participation. Global perspective How would abolition of child labour affect the PPFs of developing countries? If the use of child labour where it is assumed that such labour makes a significant contribution to total output in the economy were discontinued, the PPF will shift inward. Furthermore, the figure shows a movement from A to B on the new PPF as a result of a desire on the part of the community to increase educational outputs in order to educate the children released from child labour. The eventual effect of this increase in the overall educational standing of the community will be a rightward shift of the PPF shown in the Figure. This provides an illustration of how beneficial the abolition of child labour could be, at least in the long-term. People cannot have everything they want. Pearson offers affordable and accessible purchase options to meet the needs of your students. Connect with us to learn more. We're sorry! We don't recognize your username or password. Please try again. 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Test Bank for Economics for Today 5th Asia Pacific Edition by Layton by a - Issuu

Earnings and Discrimination. Income Inequality and Poverty. The Theory of Consumer Choice. Frontiers of . Measuring a Nation's Income. Measuring the Cost of Living. Production and Growth. Saving, Investment, and the Financial System. The Basic Tools of Finance. The Monetary System. Money Growth and Inflation. C scarcity. D opportunity cost. Efficient production means producing: A less than feasible output for a given amount of resources. B more than feasible output for a given amount of resources. C less than what is needed. D the maximum feasible output for a given amount of resources. If an economy is producing at full employment, it means that: A there are idle resources in this economy. B production is not efficient. Which of the following is true about a production possibilities curve? The curve: A indicates which production point will be chosen. B indicates only the efficient production points. C indicates how to eliminate scarcity. D indicates the feasible and non-feasible production points. A point outside a production possibilities curve reflects: A the law of increasing costs. B the economy cannot attain that point with the given state of technology and number of. C less than full use of resources and technology. D economic efficiency. A point outside a production possibilities curve reflects: A efficiency. B an impossible choice. D unemployment. Which of the following is not true about a production possibilities curve? The curve: A indicates the combinations of goods and services that can be produced with given. B indicates the efficient production points. C indicates the non-efficient production points. D indicates which production point will be chosen. Inefficient production occurs: A at any point inside the production possibilities curve. B at any point along the production possibilities curve. C at any point outside the production possibilities curve. D at a point that cannot be determined. ANS: A frontier. The production possibilities frontier shows different combinations of two goods: A that are able to be produced at a particular point of time with underemployment. B that are able to be produced at a particular point of time with the given number of re. C that are able to be produced with technology available in the future. D that will be produced at a particular point of time with or without full employment. The production possibilities in Exhibit 2. B decreasing. C does not change. D zero. B 6 million bushels of corn. C 8 million bushels of corn. D 14 million bushels of corn. B 2 millions of bushels. C 5 millions of bushels. D 4 millions of bushels. When the opportunity cost of producing laptops increases as more laptops are produced, then: A the law of increasing costs is present. B resources are equally suited to the production of laptops and to other goods. C the production possibilities frontier is a straight line. D the production possibilities frontier becomes positively sloped. ANS: A portunity costs. The law of increasing costs indicates that the opportunity cost of producing a good: A is proportional to the production of the good. B is constant to the production of the good. C increases as more of the good is produced. D decreases as more of the good is produced. ANS: C portunity costs. The law of increasing opportunity costs states that: A the opportunity cost cannot be determined when the economy operates on the production. B people always prefer having more goods. C there is always full employment. D the opportunity cost increases as production of one output increases. The production possibility curve is bowed outward from the origin because of: A the law of increasing opportunity costs. B the finite nature of the resource base. When the production possibilities curve is bowed out, resources are: A equally well-suited to production of both goods. B not being used efficiently. C not equally suited to the production of both types of goods. D of an inferior quality. The production possibility curve is bowed outward from the origin because of: A the law of decreasing opportunity costs. D the changes in the opportunity cost due to different efficiencies of the same resource in. ANS: D portunity costs. The production possibilities curve is: A convex to the origin and bowed inwards. B concave to the origin and bowed outwards. C bowed inwards. D convex to the origin and bowed outwards. According to the data given in Exhibit 2. B may be a result of unemployment. C may be a result of unused natural resources. D is impossible. According to the data in Exhibit 2. D result in underemployment. B the quantity of consumer goods is constant for each change in the quantity of capital. C greater amounts of capital goods must be sacrificed to produce each additional unit of. D the amount of consumer goods produced must be greater than zero. For the economy shown in Exhibit 2. A Not enough grain is being produced. B There must be resources that are not being used fully. C If the economy reallocates resources from A to D, it has to sacrifice some car production. D Increased grain production would be impossible. B use its given resources more efficiently than it would at point A. C experience underemployment. As shown in Exhibit 2. C the result of complete specialisation in consumer goods production. D unobtainable in this economy. C unobtainable in this economy. C it gains extra units of consumer goods but has to sacrifice units of capital goods. D it gains extra units of consumer goods without sacrificing units of capital goods. Which of the following moves from one point to another in Exhibit 2. Movement along the production possibilities curve shown in Exhibit 2. B The law of declining opportunity costs. C all inputs are homogeneous including labour. D that not all resources are utilised. Unattainable combination Z shown in Exhibit 2. B can be achieved by using more of the existing resources. C will never be achieved. D can easily be achieved by having full employment. Suppose an economy is faced with the production possibilities table shown in Exhibit 2. A increase; the production possibility table shows only the maximum efficiency points. B increase; of the law of increasing costs. C decrease; of the law of decreasing costs. D decrease; of the limited resource base. B 25; C 23; D 1; A decreases; greater efficiency in production. B increases; decreasing opportunity cost. C increases; the law of increasing costs. D increases; greater efficiency in production. Law of increasing opportunity cost states: A that opportunity cost decreases as production of one output expands. B the production possibilities frontier bows outwards. C that the stock of technology is increasing. D the production possibilities frontier bows inwards. ANS: B portunity costs. B point A is preferred to point E. C point A is preferred to point D. D point B is preferred to point A. E point B is preferred to point C. B the maximum number of consumption goods is being produced. C the economy has not achieved full employment. D the economy could not survive because no food is being produced. E the economy has not achieved maximum efficiency. Point H: A cannot be achieved by this economy today. B could be achieved today only if the economy achieved full employment. D could be achieved in the future by an advancement in technology. E could be achieved in the future by growth in the economy. From the information in Exhibit 2. B would be two units of capital goods. C would be zero. D would be five units of capital goods. E cannot be estimated. The economy experiences economic growth if: A the resource base decreases. B the production possibilities frontier shifts inwards. C the number of workers decreases. D the production possibilities frontier shifts outwards. Compare two economies A and B that start out with identical production possibilities curves. Economy A chooses an efficient point with six consumption goods and three capital goods, while economy B chooses an efficient point with four consumption goods and five capital goods. In the future we can predict: A economy A will operate inefficiently. B economy B will operate inefficiently. C economy B will grow faster than economy A. D economy A will grow faster than economy B. Pages include considerable notes in pen or highlighter, but the text is not obscured. Choose between standard or expedited shipping to make sure that your textbooks arrive in time for class. When your books are due, just pack them up and ship them back. And don't worry about shipping - it's absolutely free! Recommend this! List Price. Ask the provider about this item. Most renters respond to questions in 48 hours or less. 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