Image Transcriptionclose. For the equation TL = 25000 - (YL)2 /1000 the derivative d(TL)/d(YL)— the amount of TLs you tradeoff by changing the number of YLs—is - (YL)/500. The answer is economic models. The PPF for country 1 is 10A+30T=600 and country 2 is 30A+150T=1200 So the opportunity cost of T in country 1 is A=60-3T. Opportunity cost h. Human made resources 9. A. Factors of production g. Products people desire to have 8. Quiz Questions and Answers: Opportunity Cost and PPF Lena and Jess are roommates. Results From Past Managerial Decisions. opportunity cost—choosing to do one thing prevents us from having the opportunity to do another. Use the space below to answer the following question: ... the opportunity cost of increasing production of Good A from 0 units to 1 unit is the loss of _____ unit(s) of Good B. Exhibit 2 Answer: See Exhibit 7. Labour immobility f. Products that do not have an opportunity cost 7. a. A PPF has constant opportunity cost if the opportunity cost of a good stays the same no matter how much of it is being produced so the PPF will be a straight line (a triangle shape). 3. Practice Questions 2 - Opportunity Cost and Trade Practice question with answers. For example, given a set of scarce resources, in order to produce additional “butter,” a society has to give up the opportunity to produce some “guns.” Answer the following questions with respect to the figure below (a) The opportunity cost of moving from point b to c is 10 units of butter. b) 10 fish. What happens to the opportunity cost of carpets measured in number of looms as carpet production increases from 0 to 10 Million yards, from 10 to 22 Million yards, from 20 to 30 Million yards, and so on? 3 tomatoes; C. 5 tomatoes; D. 8 tomatoes; E. the slope of the PPF; Correct Answer: A. a) 5 coconuts. An insufficient quantity to satisfy everyone’s wants 10. In the context of a PPF, opportunity cost is directly related to the shape of the curve (see below). Your score is neither recorded nor transmitted to your instructor. Solution for 5. Swinburne University of Technology. Economic Principles (ECO10004) Uploaded by. Opportunity cost and production possibilities Juanita is a skilled toy maker who is able to produce both trucks and puzzles. Also known as PPC. However, these costs are small compared to the value of the time it takes to attend class, do homework, etc. b) 10 fish. Phelps to Olympians: 'Do what you can control' In leaked recording, Biden gripes about activist slogan Now divide both sides by 20 to get: The O.C. 4 Answers. Question: An Opportunity Cost: Multiple Choice Is An Unavoidable Cost Because It Remains The Same Regardless Of The Alternative Chosen Requires A Current Outlay Of Cash. The following TWO questions refer the diagram below, which illustrates the PPF for a producer of two goods, x and y. Practice Questions to accompany Mankiw & Taylor: Economics 2 a. Use this information to answer this set of questions. British study offers new insights on coronavirus in schools . STRAIGHT LINE PPF AND CONSTANT OPPORTUNITY COST . Which of the following statements is TRUE? A comprehensive database of opportunity cost quizzes online, test your knowledge with opportunity cost quiz questions. Examiners are keen that you understand the concept of opportunity cost in relation to the PPF. Given the PPF illustrated, what is the opportunity cost of moving from B to A? WHen you start production of a product, the average cost and marginal costs are very high. This question does precisely that! Yes. PPCs for increasing, decreasing and constant opportunity cost. And here's a quick question for you. Although the concept of opportunity cost is funda› mental, incorrect conclusions can result from difficul› ties in applying the concept. Log in. 1 decade ago. I cannot work out why the opportunity cost varies along a gradient on a PPC/PPF. Join now. What do you think is the opportunity cost of moving from point B to C in terms of the butter given up to produce the extra guns? Course. Exhibit 7 b. 2.…the opportunity cost of increasing production of Good A from 1 unit to 2 units is the loss of _____ unit(s) of Good B. Why does Opportunity Cost vary along a PPF Gradient? Our online opportunity cost trivia quizzes can be adapted to suit your requirements for taking some of the top opportunity cost quizzes. Favourite answer. 2. Given the PPF illustrated, what is the opportunity cost of moving from B to A? 2 tomatoes; B. Practice Questions to accompany Mankiw & Taylor: Economics 2 d. Why is her production possibilities frontier a straight line instead of bowed out like those presented in Chapter 2? Consider the question, “How much does it cost to go to college for a year?” We could add up the direct costs like tuition, books, school supplies, etc. Using data in the table, graph the ppf (with carpet on the vertical axis) b. a) 5 coconuts. Im looking through my book and i see that i have made a note on ppfs' i wrote that "to show rising opportunity cost we must assume maximum efficiancy plus factors of production are not perfectly reallocateable" and next to ithe ppf diagram i noted "we used the best facotrs first" I understand that it has to be max. c) 5/10 fish d) 10/5 coconuts. The opportunity cost of T in country 2 is A=40-5T. Maximum possible combinations of food and clothing that can be produced in a given period of time: Units of food (millions) Units of clothing (millions) 8.0 0.0 7.0 2.2 6.0 4.0 5.0 5.0 4.0 5.6 3.0 6.0 2.0 6.4 1.0 6.7 0.0 7.0 Draw a PPF for this economy. 1 Answer to 1) A normal PPF exhibits ___ opportunity costs.zeroconstantdecreasingincreasing. The following TWO questions refer the diagram below, which illustrates the PPF for a producer of two goods, x and y. Comparative advantage and the gains from trade . The opportunity cost of 20 wood is 10 food, or the OC of 20 wood = 10 food. Jess will agree to clean the bathroom only if Lena vacuums the living room. In economic terms, the negative slope is due to the presence of opportunity cost. In Exhibit 2, plot and connect these points to create Athletic Country's production possibilities frontier. Question: 96. Lena hates to clean the bathroom. Production levels within the PPF are not attainable . Increasing opportunity costs cause the PPF to be bowed out. Which of the following statements is TRUE? He has over twenty years experience as Head of Economics at leading schools. Sort by: Top Voted. 2017/2018 PPF and Opportunity Cost: The table below provides information about the production possibility frontier for Economy Z. Have a go! Directions This quiz contains 15 multiple choice questions. c) 5/10 fish d) 10/5 coconuts. 2. Join now. But, opportunity cost usually will vary depending on the start and end points. Dayne Lee. 1. After you have finished the quiz, click on the Grade my Quiz button at the bottom of the page. She has 8 hours a… In fact, such a movement along the PPF illustrates one of the most important concepts in microeconomics we've already briefly touched upon, the concept known as opportunity cost. This is the answer we want. These are examples of explicit costs, i.e., costs that require a money payment. Lesson summary: Opportunity cost and the PPC. Free goods j. Relevance. Based on the PPF in the figure, the opportunity cost of producing the seventh carrot is. c. Opportunity cost - to gain more of a good, something else must be given up. Economic goods i. Think about what happens to the opportunity cost of TLs—measured in units of yoga lessons (“YL”)—as the amount of resources devoted to producing TLs increases. 5. Products that have an opportunity cost 6. Log in. Geoff Riley FRSA has been teaching Economics for over thirty years. Explanation: A When the seventh carrot is produced, production of tomatoes goes from 10 to 8, so the opportunity cost is 2 tomatoes. Explain briefly. As you rproduce more, you … Quiz on the PPC, Opportunity Cost, and the Gains from Trade. The PPF can be used to calculate the opportunity cost of various production decisions. This is the currently selected item. I. Select the correct answer by clicking on the appropriate button. Lv 5. Practice: Opportunity cost and the PPC. tonushka tonushka 29 minutes ago Economy Secondary School +5 pts. This economy’s PPF is linear between each of the points given in the table (thus, the PPF is linear between points A and B, linear between points B and C, but not linear between points A and C). This happens because all the economy's resources are already in use, and therefore obtaining more cars would always require sacrificing some milk. Next lesson. Click here to get an answer to your question ️ what is opportunity cost and PPF ?? 5. This short revision video looks at a PPF with diminishing returns (increasing marginal opportunity cost) and a linear PPF where the marginal opportunity cost is constant. Think of Economies of scale. The negative slope of the PPF illustrates the fact that larger quantities of cars correspond to a smaller amount of milk, and vice versa. Get help with your Production–possibility frontier homework. 2. Examiners like testing the relationship between the shape of a PPF and the concept of opportunity cost. University. Answer: Because Angela’s productivity in pot and mug production is constant – it doesn’t depend on how many mugs or pots she is making. Finally, a PPF has decreasing opportunity costs if the opportunity cost of a good gets smaller as more of it (this promotes specialization) and the PPF will be bowed in (like a crescent moon). As you can see, to move from point A to point B, society gains 40 dozen eggs at a "cost" of 200 cakes of soap, so the opportunity cost of a dozen eggs is 5 cakes of soap (200/40). Answer Save. Academic year. of 1 wood =10/20 food= .5 food. The basic economic problem is one rooted in both the natural world and in human greed. These two opportunity costs are written in units of A given up for units of T. My question is, which country would specialize in T? PPF and Opportunity cost questions. I. ekonomix. 1. Ask your question. If Athletic Country currently produces 100 bats and 400 rackets, what is the opportunity cost of an additional 100 bats? 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