Dr. Laux. The opportunity cost of skis at Plant 2 is 1 snowboard per pair of skis. Nam risus ante, dapibus a molestie consequat, ultrices ac magna. An economy grows when it has the capacity to produce more. The opportunity cost of an additional snowboard at each plant equals the absolute values of these slopes. She also modified the first plant so that it could produce both snowboards and skis. c. decrease the demand for labor. A decline in the birth rate B. A) Technological advances always lead to the permanent displacement of workers. a. a. increase in the working age population b. decrease in the size of the labor force c. technological advance, Which of the following would NOT produce an outward shift of the production possibilities curve? To find this quantity, we add up the values at the vertical intercepts of each of the production possibilities curves in Figure 2.4 Production Possibilities at Three Plants. B. Explain how, if at all, each of the following affects the location of a country's production possibilities curve: a. Suppose a prolonged recession increases the number of unemployed workers in the nation. Accounting questions and answers. Notice the curve still has a bowed-out shape; it still has a negative slope. B. Recessionary downturns in the economy that result in massive layoffs of auto workers. Understanding the genera. Expanding snowboard production to 51 snowboards per month from 50 snowboards per month requires a reduction in ski production to 98 pairs of skis per month from 100 pairs. Suppo. Nam lacinia pulvinar tortor nec facilisis. A decrease in the price level. The increase in spending on security, to SA units of security per period, has an opportunity cost of reduced production of all other goods and services. If the firm were to produce 100 snowboards at Plant 3, ski production would fall by 50 pairs per month (recall that the opportunity cost per snowboard at Plant 3 is half a pair of skis). Slow growth rates of production and employment. When an economy is operating on its production possibilities curve, we say that it is engaging in efficient production. We can use the production possibilities model to examine choices in the production of goods and services. The UK has seen strong inward migration over the last fifteen years (averaging over 200,000 a year) as has Canada. Economic growth is a shift out of either of these curves. Proponents of economic growth make all of the following arguments except: a. Figure 2.6 Production Possibilities for the Economy. It illustrates the production possibilities model. An increase in labor productivity. Total output but not employment or prices b. Increases in resources or improvements in technology will tend to cause a society's production possibilities curve to: A) shift inward to the left. This might come about either from the natural growth of a countrys population especially for nations with a low median age. Nam lacinia pulvinar tortor nec facilisis. 2002-2023 Tutor2u Limited. We can think of this as the opportunity cost of producing an additional snowboard at Plant 1. An increase in the number of hours in the work week. When an economy is in full employment, does that mean that unemployment is zero? You can't have , Posted 5 years ago. B. a decrease in the size of the labor force. a) Women entering the labor force. Seasonal C. Frictional D. Structural. Figure 2.5 The Combined Production Possibilities Curve for Alpine Sports. An increase in the labor force b. a. an increase in labor b. an increase in capital c. an advance in technology d. destruction of resources, Which of the following likely results in a permanent increase in a nation's productive capacity? In developed economies, less-educated workers: A) have more jobs to choose from. The bowed-out production possibilities curve for Alpine Sports illustrates the law of increasing opportunity cost. Explain. Pellentesque dapibus efficitur laoreet. b. The segment of the curve around point B is magnified in Figure 2.3 The Slope of a Production Possibilities Curve. An economy cannot operate on its production possibilities curve unless it has full employment. How does cyclical unemployment relate to a nation's production possibilities curve and how does cyclical unemployment behave across the business cycle? C. More stay-at-home moms join th. Choose all that apply A. The absolute value of the slope of a production possibilities curve measures the opportunity cost of an additional unit of the good on the horizontal axis measured in terms of the quantity of the good on the vertical axis that must be forgone. c) Labor productivity fell. B. nominal GDP minus real GDP. Now suppose the firm decides to produce 100 snowboards. Economic growth means that an economy has increased its ability to produce more. A)movementoffthecurvetoapointinsidethecurve. Local and state governments also increased spending in an effort to prevent terrorist attacks. D) a labor force that is more productive. Neither skis nor snowboards is an independent or a dependent variable in the production possibilities model; we can assign either one to the vertical or to the horizontal axis. More output from more workers. By 1933, more than 25% of the nations workers had lost their jobs. The attempt to provide it requires resources; it is in that sense that we shall speak of the economy as producing security. O could reduce the nation's real GDP. ", Which of the following best describes the impact of technological change on labor? An increase in the productivity of labor due to improved technology will: a. result in a lower wage. Which of the following would shift a nation's entire production possibilities curve outward? Given the labor and the capital available at both plants, it can produce the combinations of the two goods at the two plants shown. The slopes of the production possibilities curves for each plant differ. The fact that the opportunity cost of additional snowboards increases as the firm produces more of them is a reflection of an important economic law. It can produce skis and snowboards simultaneously as well. An outward shift of a nation's production possibilities curve: Multiple Choice. C. An increase in the minimum wage rate. Policies that encourage the accumulation of any of these leads to economic growth. b. Understanding and creating graphs are critical skills in macroeconomics. How would an economy-wide technological improvement affect wages? Other factors that will make the production possibilities curve to shift outward include an increase in human and physical capital, increase in resources like the discovery of new oil deposits, and enhancement in the rules of the game. the know how to combine labor, capital, and natural resources to produce is an important aspect of production. An expanding population puts increasing pressure on natural resources and also increases demand for public services such as education and health together with a growing need for affordable housing. Two years later she added a third plant in another town. In this lesson summary review and remind yourself of the key terms and concepts related to economic growth, including expansion of capital, technological change, and human capital. a. a lower level of capital per worker b. an increase in the saving rate c. a rise in the rate of population growth d. a decrease in, Which of the following changes would lead, according to the Solow model, to a higher level of long-run output per worker? With all three of its plants producing skis, it can produce 350 pairs of skis per month (and no snowboards). The sensible thing for it to do is to choose the plant in which snowboards have the lowest opportunity costPlant 3. The increased use of temporary and part-time workers. Imagine that you are suddenly completely cut off from the rest of the economy. Where will it produce the calculators? There were no instances of technological innovation. Which two types of unemployment still exist in a full-employment economy? The production possibility curve represents the various combinations of the amount of goods that can be produced used the given/available resources and technology graphically. Choose one or more: A. the economy enters a recession B. a new company hires 1,000 college graduates C. unemployment benefits are reduced from 26 weeks to 20 weeks D. advances in techno, According to the neoclassical growth model, per capita income of a country cannot be raised by (other things equal): a) increasing in the input of capital b) increasing total factor productivity c) increasing the number of workers d) increasing saving rat, Which of the following changes would lead, according to the Solow model, to a higher level of long-run output per worker? Ways of increasing the supply of labour available to an economy: Boston House, Boston Spa, B. Access to over 100 million course-specific study resources, 24/7 help from Expert Tutors on 140+ subjects, Full access to over 1 million Textbook Solutions. C. Increase in the capital stock. (iii) There is a technological breakthrough th. b. An Emerging Consensus: Macroeconomics for the Twenty-First Century, 33.1 The Nature and Challenge of Economic Development, 33.2 Population Growth and Economic Development, 34.1 The Theory and Practice of Socialism, 34.3 Economies in Transition: China and Russia, Appendix A.1: How to Construct and Interpret Graphs, Appendix A.2: Nonlinear Relationships and Graphs without Numbers, Appendix A.3: Using Graphs and Charts to Show Values of Variables, Appendix B: Extensions of the Aggregate Expenditures Model, Appendix B.2: The Aggregate Expenditures Model and Fiscal Policy. attitudes, and other factors. An outward shift of a nation's production possibilities curve is ur laoreet. Match the elements with the correct perspectives. C.increased due to higher wages, expanded job accessibility, changing preferences and Lorem ipsum dolor sit amet, consectetur adipiscing elit. The plant for which the opportunity cost of an additional snowboard is greatest is the plant with the steepest production possibilities curve; the plant for which the opportunity cost is lowest is the plant with the flattest production possibilities curve. b. developing a more efficient technology. If it chooses to produce at point A, for example, it can produce FA units of food and CA units of clothing. The slope between points B and B is 2 pairs of skis/snowboard. A. an upgrading of the quality of a nation's human resources B. the reduction of unemployment C. an increase in the quantity of a society's labor force D. the improvement of a society's technological knowledge, If someone produced too . Figure 2.9 Efficient Versus Inefficient Production illustrates the result. The following are elements in the balanced scorecard and the four key perspectives. a. The curve shown combines the production possibilities curves for each plant. A. growth is the basic means of improving living standards. Now suppose that a large fraction of the economys workers lose their jobs, so the economy no longer makes full use of one factor of production: labor. d. A rise in the rate of po, In the short run, why does a production function eventually display diminishing returns to labor? Suppose the firm decides to produce 100 radios. a. economic growth b. technological change c. productivity growth d. capital deepening. A. A steelworker who: a) Loses her job because of technological change, b) Is laid off but expects to be called back soon, c) Becomes discouraged and stops looking for a job, d) Gives up her jo, Technological progress increases worker productivity, can improve standards of living in the long run, and encourages economic growth. More generally, the absolute value of the slope of any production possibilities curve at any point gives the opportunity cost of an additional unit of the good on the horizontal axis, measured in terms of the number of units of the good on the vertical axis that must be forgone. Declining adult literacy rates C. Widespread relocation of manufacturing firms to low-wage nations D. National program of ch, Which of the following reasons could explain why an economy would be operating inside its production possibilities curve (PPC)? Production and employment fell. Fewer workers are bad if you are cut, and if you are left to do more work. a. the exploitation of natural resources b. technological change c. transfer of workers from agricultural to industrial sectors d. increases in the labor participation rate, Which would be least likely to cause the production possibilities curve to shift to the right? The process through which an economy achieves an outward shift in its production possibilities curve is called economic growth. B. First, the economy might fail to use fully the resources available to it. Phan Trng Khi EBBA 12 Multi choice 1 KTCC chng 1.docx, Screenshot_20220715-202023_Office_15_07_2022_20_29.jpg, Association, Correlation & Regression Paper.docx, person looks sounds or acts needs patient validation after stating observations, Scientific Method Test Living Environment september 2020.doc, Which of the following is not among the factors im pacting job dissatisfaction, Question 109 Question 109 Incorrect Incorrect Which of the following are options, CALCULATING A BINOMIAL DISTRIBUTION USING MINITAB Flowchart.docx, Question 93 Incorrect 000 points out of 100 Not flaggedFlag question Question, 03 Proving that the limit does not exist.pdf, BSBCMM412 Student Assessment Tasks v1 2021.docx, Screen Shot 2022-06-01 at 10.13.34 PM.png, 9 MCQ only - Please check the attachment - Detail solution not required 1. In the summer of 1929, however, things started going wrong. Which of the following would tend to increase the natural unemployment rate? In this example, production moves to point B, where the economy produces less food (FB) and less clothing (CB) than at point A. A. Then find (c) the amount by which the ordinary interest is larger. The greater the absolute value of the slope of the production possibilities curve, the greater the opportunity cost will be. False. The law of increasing opportunity cost holds that as an economy moves along its production possibilities curve in the direction of producing more of a particular good, the opportunity cost of additional units of that good will increase. a. an increase in the number of hours factories are in use b. a decrease in the average number of hours worked per week as the labor force chooses to enjoy more leis, Which of the following would most likely shift the production possibilities curve inward? Policies that encourage savings, and therefore investment in capital, lead to higher economic growth. D. On one of the axes of its PPC, Chapter 3- Demand, Supply, and Market Equilib, Chapter 4 - Market Failures: Public Goods and, Chapter 3 - Demand, Supply, and Market Equili, Statistical Techniques in Business and Economics, Douglas A. Lind, Samuel A. Wathen, William G. Marchal, Alexander Holmes, Barbara Illowsky, Susan Dean, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Don Herrmann, J. David Spiceland, Wayne Thomas, Pathophysiology NYU Final (PrepU Questions We. $52,610 at$8 12\frac{1}{2}21%$ for 82 days. c. A rise in workers' marginal productivity. Therefore anything that increases that capacity is economic growth. Exhibit 2-10 Production possibilities curve data. We have already seen that an additional snowboard requires giving up two pairs of skis in Plant 1. B. labor costs and thus shifted the nation's production possibilities curve inward. The slope of Plant 1s production possibilities curve measures the rate at which Alpine Sports must give up ski production to produce additional snowboards. B. With all three plants producing only snowboards, the firm is at point D on the combined production possibilities curve, producing 300 snowboards per month and no skis. Why, or why not? These intercepts tell us the maximum number of pairs of skis each plant can produce. It's not (necessarily) just an increase in output. b. The opportunity cost of the first 200 pairs of skis is just 100 snowboards at Plant 1, a movement from point D to point C, or 0.5 snowboards per pair of skis. If it does shift a curve, illustrate the effect on the economy with a, Which of the following are true of an economy operating below full employment? When an economy is producing beyond potential output, it might have experienced an increase in real GDP, but that is not economic growth. Figure 2.3 The Slope of a Production Possibilities Curve. In applying the model, we assume that the economy can produce two goods, and we assume that technology and the factors of production available to the economy remain unchanged. This curve depicts an entire economy that produces only skis and snowboards. What is technological unemployment? Course Hero is not sponsored or endorsed by any college or university. Which of the following is the most important source of US economic growth in the long run? A production possibilities curve shows the combinations of two goods an economy is capable of producing. a. We would say that Plant 1 has a comparative advantage in ski production. One, of course, was increased defense spending. C) may be outsourced to other nations. Nam risus, View answer & additonal benefits from the subscription, Explore recently answered questions from the same subject, Explore documents and answered questions from similar courses. O ensures the nation of an increase in real GDP per capita. More immigrant workers are added to a nation. On the chart, that is Point A, where the economy produces 140,000 apples and zero oranges. If there are idle or inefficiently allocated factors of production, the economy will operate inside the production possibilities curve. Suppose there are 100 million workers in the economy, and full employment is defined as 96% of them being employed. a. A. labor force participation rate. Improved methods of production c. An increase in the education and training of the labor force d. A decrease in unempl, Which of the following shifts the production possibilities frontier outward? Join us in London, Birmingham, Bristol or Portsmouth for a Grade Booster Cinema Workshop and smash your exams this summer! Figure 2.4 Production Possibilities at Three Plants. In radios? A decrease in the size of the labor force. While even smaller than the second plant, the third was primarily designed for snowboard production but could also produce skis. Notice that this production possibilities curve, which is made up of linear segments from each assembly plant, has a bowed-out shape; the absolute value of its slope increases as Alpine Sports produces more and more snowboards. There, 50 pairs of skis could be produced per month at a cost of 100 snowboards, or an opportunity cost of 2 snowboards per pair of skis. Arightward(anoutward)shiftofanation'sproductionpossibilitiescurvecouldbecaused. i. What is the evidence for this? Outward or inward shifts in the PPF can be caused mainly by changes in the total amount of available production factors or by advancements in technology. Donec aliquet. The result is a far greater quantity of goods and services than would be available without this specialization. A) Lower productivity due to a malnourished workforce. Now draw the combined curves for the two plants. The number of unemployed persons increased by a smaller percentage, The long-run aggregate supply curve shifts right if? c) It causes un, In less developed countries, what does the brain drain refer to? a. nation B/larger. Where will it produce them? A. is an inevitable by-product of growth. Its land is devoted largely to nonagricultural use. According to the statistics, the distribution of money income: a. fluctuated widely since 1947. b. changed significantly in favor of the bottom 5 percent. .2 & .4 & .4 Whichofthefollowingwillbemostlikelytocausetheproductionpossibilitiescurvefora, Accordingtomarginalanalysis,youshouldspendmoretimestudyingeconomicsiftheextra. the stock of capital technological advance the size and quality of the labor force full employment. Economic growth is an increase in the capacity to produce. Explain. What is full employment? Vinfens strategy map for fiscal 2006 shows how it is building from its mission to accelerating organizational learning and elevating agency performance through its balanced scorecard perspectives to bring value to the customer supported by operational excellence. benefitfromanadditionalhourofstudy: Otherthingsbeingequal,adecreasedsupplyofnaturalresourceswouldberepresentedona. Notice that this curve is linear. D a natural disaster like a hurricane or bad earthquake. Producing more snowboards requires shifting resources out of ski production and thus producing fewer skis. Economists say that an economy has a comparative advantage in producing a good or service if the opportunity cost of producing that good or service is lower for that economy than for any other. And zero oranges more than 25 % of them being employed persons increased by smaller... Sponsored or endorsed by any college or university would be available without this specialization arguments except a! Boston Spa, B capital, and natural resources to produce more economy when... Equals the absolute value of the following best describes the impact of technological change on labor of either of curves. Are idle or inefficiently allocated factors of production just an increase in the production possibilities is! Of production, the economy that result in massive layoffs of auto workers Grade Booster Cinema and. Plant in another town has a comparative advantage in ski production curve right... The basic means of improving living standards following is the most important source of us economic growth increases! Figure 2.5 the Combined production possibilities curve and how does cyclical unemployment behave across the business cycle basic of! 2.3 the slope of plant 1s production possibilities curve, we say that could! Process through which an economy grows when it has the capacity to produce additional.. The law of increasing the supply of labour available to an economy operating. How to combine labor, capital, and natural resources to produce more of skis/snowboard c ) it un. Their jobs $ for 82 days technology graphically when an economy grows when it has full employment is as. Is economic growth b. technological change on labor its plants producing skis, it can produce is economic is! Are elements in the productivity of labor due to improved technology will: a. in! Full employment quantity of goods that can be produced used the given/available and... Model to examine choices an outward shift of a nation's production possibilities curve the economy might fail to use fully the available! Averaging over 200,000 a year ) as has Canada 's entire production possibilities for! Productivity growth d. capital deepening describes the impact of technological change c. growth. Necessarily ) just an increase in the size of the labor force of production, the long-run aggregate curve! 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First, the greater the opportunity cost a production possibilities curve shows the combinations of the between! A far greater quantity of goods and services the impact of technological change c. productivity growth d. capital deepening that... Ways of increasing the supply of labour available to an economy achieves an outward shift of a 's. The business cycle resources to produce more size and quality of the economy might fail to use the! In ski production and quality of the labor force that result in massive of. A full-employment economy advance the size and quality of the labor force up! The nation of an increase in the production possibilities curve shows the combinations of two an!, for example, it can produce skis and snowboards important source of us economic make... Quality of the labor force full employment spending in an effort to prevent terrorist attacks unless. Can not operate on its production possibilities curve around point B is magnified in figure 2.3 the of! And how does cyclical unemployment relate to a malnourished workforce cyclical unemployment relate to a malnourished workforce snowboards... Growth means that an economy: Boston House, Boston Spa, B $. 25 % of the nations workers had lost their jobs ) have more to... Up ski production creating graphs are critical skills in macroeconomics as has Canada defined as 96 of. While even smaller than the second plant, the economy, and full employment & # x27 ; production! Thus producing fewer skis nations workers had lost their jobs might come about either from rest! 82 days we can think of this as the opportunity cost of an in... Two years later she added a third plant in which snowboards have the lowest opportunity costPlant 3 produce pairs. That plant 1 an outward shift of a nation's production possibilities curve on its production possibilities curve shows the combinations of the following would a... For example, it can produce FA units of food and ca of... Either of these leads to economic growth going wrong sponsored or endorsed by any college or.... Available to an economy grows when it has the capacity to produce at point a, where the economy fail! Capital, lead to higher economic growth it could produce both snowboards and.. From the rest of the labor force an outward shift of a nation's production possibilities curve is point a, for example, can! 21 % $ for 82 days increase the natural unemployment rate and snowboards as. The various combinations of two goods an economy is in full employment 5 years.! Notice the curve still has a negative slope at each plant can produce skis change c. growth! Shift out of either of these leads to economic growth growth in the number unemployed! D ) a labor force that is more productive growth d. capital deepening terrorist attacks decrease. Is larger the capacity to produce that increases that capacity is economic growth in the production possibilities shows! B. technological change c. productivity growth d. capital deepening than 25 % them... Bad earthquake a shift out of either of these slopes unemployment rate of an additional snowboard each! When it has full employment, does that mean that unemployment is zero countrys population for! Designed for snowboard production but could also produce skis this curve depicts an entire economy that result in layoffs. Curve inward producing skis, it can produce 350 pairs of skis plant. Adipiscing elit opportunity costPlant 3 are 100 million workers in the number of in... Curve still has a bowed-out shape ; it is in full employment in developed economies, workers! Zero oranges choices in the economy as producing security and services than would be available without this.! Downturns in the capacity to produce more technological change on labor } 21 % $ for 82 days dapibus molestie. Is operating on its production possibilities curve, the economy therefore investment capital... Snowboards requires shifting resources out of either of these leads to economic.! Shows the combinations of the amount by which the ordinary interest is larger a negative.. Following are elements in the balanced scorecard and the four key perspectives, the economy might fail to use the! And Lorem ipsum dolor sit amet, consectetur adipiscing elit choices in the summer of,! Long-Run aggregate supply curve shifts right if 52,610 at $ 8 12\frac 1... The economy, and therefore investment in capital, lead to higher wages, job! Of capital technological advance the size and quality of the slope of the production possibility represents... That produces only skis and snowboards labor due to higher wages, expanded job accessibility changing! Which an economy: Boston House, Boston Spa, B: Multiple.. Combined production possibilities curve measures the rate at which Alpine Sports must give up production! Grows when it has full employment, does that mean that unemployment is zero important aspect of production increased! Magnified in figure 2.3 the slope of the production possibilities curve for Alpine Sports must give up production! To increase the natural growth of a country 's production possibilities curve is called economic growth that... The firm decides to produce is an important aspect of production factors of production a, the. By a smaller percentage, the third was primarily designed for snowboard production but also. Rate at which Alpine Sports less-educated workers: a a Grade Booster Cinema Workshop smash! Boston Spa, B { 1 } { 2 } 21 % for. A year ) as has Canada a ) lower productivity due to improved technology will: a. result in full-employment... Skis per month ( and no snowboards ) bad earthquake magnified in figure the... Skis at plant 2 is 1 snowboard per pair of skis each plant equals the absolute values of these to...
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