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Chapter 2: Q. b - For Critical Thinking (page 32)
What must be true of the trade-off perceived by people who have multiple sex partners?
The opportunity cost of time lost.
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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鈥檚 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 |
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鈥� 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.
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?
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 Combination | Units of Consumer Goods | Units of Human Capital |
| A | 0 | 100 |
| B | 10 | 97 |
| C | 20 | 90 |
| D | 30 | 75 |
| E | 40 | 55 |
| F | 50 | 30 |
| G | 60 | 0 |
(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?
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?
| Economics | Biology |
| 100 | 40 |
| 90 | 50 |
| 80 | 60 |
| 70 | 70 |
| 60 | 80 |
| 50 | 90 |
| 40 | 100 |
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