If Ned uses all his resources in the production of potato chips then it can produce a maximum of 50 potato chips.
On the other hand, if Ned uses all his resources in the production of computer chips then it can produce a maximum of 25 computer chips.
Potato chips are taken on the Y-axis. So, Y-intercept would be 50.
Computer chips are taken on the X-axis. So, X-intercept would be 25.
Following is the required figure -
Calculate the opportunity cost of computer chip production in terms of potato chips/computer chips -
Opportunity cost = Maximum quantity of potato chips that can be produced/Maximum quantity of computer chips that can be produced
Opportunity cost = 50/25 = 2
Thus,
The opportunity cost of computer chip production in terms of potato chips/computer chip is 2.
Hence, the correct answer is the option (b) [2].
Ans.
Suppose that Ned can produce either potato chips or computer chips. If he only produces potato...
Suppose that Ned can produce either potato chips or computer chips. If he only produces potato chips he can produce 12 in a day. If he only produces computer chips, he can produce 16 in a day. Drag the endpoints of the line to plot his production possibilities frontier (PPF) on the graph.
8. Problems and Applications Q8 Suppose that in a year an American worker can produce 60 shirts or 30 computers and a Chinese worker can produce 60 shirts or 12 computers. There are 1 million workers in each country. Use the blue line (circle symbol) to graph the production possibilities frontier (PPF) for the United States, and use the green line (triangle symbol) to graph the production possibilities frontier for China. U.S. PPF China PPF Quantity of Computers (Millions) HHHHHHHHHH...
Suppose that in a year an American worker can produce 80 shirts or 20 computers and a Chinese worker can produce 60 shirts or 20 computers. There are 1 million workers in each country. Use the blue line (circle symbol) to graph the production possibilities frontier (PPF) for the United States, and use the green line (triangle symbol) to graph the production psies frontier for China 30 27 24 21 18 China PPF 15 U.S. without Trade China without Trade...
Question 5 a Tortilla chips and tomato salsa are a popular snack food combination. Suppose a genetically altered bacteria helps protect tomatoes from frost damage, and the tomato harvest increases. Analyse qualitatively the resulting changes in the prices of tortilla chips and salsa. How does your analysis differ from a partial equilibrium analysis? b. Consider a potential, voluntary exchange between two people assuming that both have complete information about each other's preferences and there are no transaction costs. Ted and...
10. workers: Larry, Moe, and Curly. Each works 10 hours a day and can produce two services: mowing lawns and washing Using the blue points (circle symbol), graph the production possibiities frontler (PPF) for this economy on the folowing graph. Then use the black the purpie point (diamond symbol) to identify point D on the graph. mows lawns. (D) Using the blue points (circle symbol), graph the production possiblities frontier (PPF) for this economy on the folowing graph. Then use...
8. Problems and Applications Q8 Suppose that in a year an American worker can produce 60 shirts or 30 computers and a Chinese worker can produce 60 shirts or 12 computers There are 1 million workers in each country Use the blue line (circle symbol) to graph the production possibilities frontier (PPF) for the United States, and use the green line (triangle symbol) to graph the production possibilities frontier for China U.S. PPF 21 18 S15 China PPF U.S. without...
Bill can produce either tables or chairs. Bill can work up to 10 hours a day. His production possibilities are given in the table below: 1. Construct the production possibilities frontier (PPF) for Bill. Put tables on the Horizontal axis and chairs on the vertical axis. 2. What is Bill’s opportunity cost of producing one additional table? 3. What is Bill’s opportunity cost of producing one additional chair? 4. Currently Bill is producing 20 tables and 40 chairs. a. Is...
The accompanying graph contains the production possibilities frontier (PPF) for Rubberland. Rubberland only makes two products, rubber band balls and rubber hoses, and on a given day can produce according to the PPF in the graph. Point A on the PPF represents the combination of the two goods Rubberland currently produces. When a new method of rubb productivity of all Rubberland's inputs increases. Please shift the PPF to show this change Assume that Rubberland does not make more rubber band...
The accompanying graph contains the production possibilities frontier (PPF) for Rubberland. Rubberland only makes two products, rubber band balls and rubber hoses, and on a given day can produce according to the PPF in the graph. Point A on the PPF represents the combination of the two goods Rubberland currently produces. When a new method of rubber processing is discovered, the productivity of all Rubberland's inputs increases. Please shift the PPF to show this change. Assume that Rubberland does not...
Lorenzo is a skilled toy maker who is able to produce both trucks and kites. He has 8 hours a day to produce toys. The following table shows the daily output resulting from various possible combinations of his time. Choice Hours Producing Produced (Trucks) (Kites) (Trucks) (Kites) A 8 0 4 0 B 6 2 3 11 C 4 4 2 16 D 2 6 1 19 E 0 8 0 20 On the following graph, use the blue points...