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Chapter 2: Q 8 (page 45)

Consider a change in the table in Problems 2-6. The student鈥檚 set of opportunities is now as follows: Does the PPC illustrate the law of increasing additional cost? What is the opportunity cost to this student for the additional amount of study time on economics required to move her grade from 60 to 70? From 90 to 100?

EconomicsBiology
10040
9050
8060
7070
6080
5090
40100

Short Answer

Expert verified

The PPC does not follow the increasing cost of additionals.

The opportunity cost for moving her grades from 60 to 70 is 10 marks and from 90 to 100 is also 10 marks.

Step by step solution

01

Step 1. Given Information.

The data for the marks in Biology and Economics is,

EconomicsBiology
10040
9050
8060
7070
6080
5090
40100
02

Step 2. The PPC illusration.

The PPC is the various combinations that an economy can operate in a given time period.

The PPC does not follow the increasing cost of additionals as it is a linearr straight line.

03

Step 3. Opportunity Cost

The opportunity cost for moving her grades from 60 to 70 is 10 marks and from 90 to 100 is also 10 marks since a 10 marks increase in Economics will lead to 10 marks downfall in Biology.

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Most popular questions from this chapter

Suppose that in Fig 2-4, the nation currently has sufficient resources to produce combinations located along only the innermost production possibilities curve. In addition, suppose that the nation's residents have determined that smartphones function mainly as consumption goods while tablet devices function primarily as capital goods. If the nation produces no additional tablets this year, will the intermediate-shifted PPC resulting from minimal economic growth or the farthest shifted PPC caused by more significant economic growth be more likely to apply next year?

Based on the information in Problems 2-15, should you and your roommate specialize in a particular task? Why? And if so, who should specialize in which task? Show how much labor time you save if you choose to 鈥渢rade鈥� an appropriate task with your roommate as opposed to doing it yourself.

If the U.N. follows through on a proposal to add production targets for 148 more items to its Sustainable Development Goals, why might we expect that the opportunity cost in terms of other goods and services that must be forgone could be even greater? Explain briefly.

A nation鈥檚 residents can allocate their scarce resources either to producing consumer goods or to producing human capital鈥攖hat is, providing themselves with training and education. The following table displays the production possibilities for this nation:

Production CombinationUnits of Consumer GoodsUnits of Human Capital
A0100
B1097
C2090
D3075
E4055
F5030
G600

(a) Suppose that the nation鈥檚 residents currently produce combination A. What is the opportunity cost of increasing the production of consumption goods by 10 units? By 60 units?

(b) Does the law of increasing additional costs hold true for this nation? Why or why not?

Why do you suppose that economists have estimated the dollar value of the combined opportunity costs of time that U.S. commuters spend in gridlocked traffic to be in excess of $150billion per year? Explain your reasoning.
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