Yes, because if the rich were to purchase a lot of goods at one time shortages would result. this particular economy has no comparative advantage in production any economic good. C.
Q. Can wash fold and iron a basket of laundry in two hours and prepare a meal in one hour?
You can wash, fold, and iron a basket of laundry in two hours and prepare a meal in one hour. Your roommate can wash, fold, and iron a basket of laundry in three hours and prepare a meal in one hour. a. you; neither.
Q. What is the total opportunity cost that the student incurs by attending college for one semester?
What is the total opportunity cost that the student incurs by attending college for one semester? $8,500 ($3,000+$500+5,000) You will have room and board expenses in or out of college.
Q. Why do you suppose that the bank was willing to sell the house to Ms Krawiec for only $10?
The bank was willing to sell the house at auction to Ms. Krawiec for only $10 because if the bank paid to renovate the property, paid the back taxes, and paid the overdue water bill, the property would have been lower than the bank’s total costs.
Q. Why does a production possibilities curve potentially bow outward quizlet?
Why does a production possibilities curve potentially bow outward? Resources are not perfectly adaptable for the production of both goods.
Q. How do people and businesses specialize?
Examples of how individuals and businesses specialize. Businesses or firms use resources to produce goods and services (the product market). Firms purchase resources from the factor market, supplied by households, to create goods and services. Households purchase and goods and services from the product market.
Q. Why do countries not completely specialize?
Why do countries do not completely specialize? – Because not all goods are traded internationally. – Because production of most goods involves increasing opportunity costs.
Q. What are the three reasons we don’t see specialization in the real world?
We do not see complete specialization in the real world for three main reasons: Not all goods and services are traded internationally. – Some services are difficult to export, such as medical care. Production of most goods involves increasing opportunity costs.
Q. When a country specializes in the production of a good?
When a country specializes in the production of a good, this means that it can produce this good at a lower opportunity cost than its trading partner. Because of this comparative advantage, both countries benefit when they specialize and trade with each other.
Q. Who has an absolute advantage in coffee production who has an absolute advantage in nut production?
He could also choose to produce only nuts, in which case he can produce 20 pounds of nuts a week. Who has an absolute advantage in coffee production? Who has an absolute advantage in nut production? Jill has an absolute advantage in both coffee and nuts.
Q. Who has an absolute advantage in coffee production?
Answer:Brazil has an absolute advantage in coffee:–Producing a pound of coffee requires only one labor-hour in Brazil, but two in Argentina.
Q. Who has the comparative advantage in coffee production?
Brazil has a comparative advantage in coffee production and should specialize in coffee production. scarce resources. The production possibility curve illustrates that: if all resources of an economy are being used efficiently, more of one good can be produced only if less of another good is produced.
Q. What is the opportunity cost for Jessica to produce one more pound of nuts?
a. What is the opportunity cost for Jessica to produce one more pound of nuts? Opportunity cost = 0.50 pounds of coffee will be given up when she produce one pound of nut.
Q. What would Donna and Chuck agree to as acceptable terms of trade?
What would Donna and Chuck agree to as acceptable terms of trade? 3 bushels of pears per bushel of apples. As a result, anything more than 2 bushels of pears up to 4 bushels of pears would be acceptable terms of trade.
Q. Who has the comparative advantage in coffee production Julia or Oscar?
b)Oscar has absolute advantage in the production of coffee. Julia has a higher production capacity for coffee (20 pounds to 16 pounds) and therefore has the absolute advantage.
Q. What does the production possibility curve illustrate?
The Production Possibilities Curve (PPC) is a model used to show the tradeoffs associated with allocating resources between the production of two goods. The PPC can be used to illustrate the concepts of scarcity, opportunity cost, efficiency, inefficiency, economic growth, and contractions.
Q. What are the three things a PPC shows?
A production possibilities curve shows efficiency, when the maximum amount of goods and services possible is being produced, underutilization, when fewer than the maximum amount is being produced, and the law of increasing opportunity costs in a visual way.
Q. What does the slope of the production possibility curve indicate?
The slope of a production possibilities curve illustrates the tradeoff between the production of two goods. This tradeoff occurs due to limited resources. If all available resources are engaged production, then an increase in the production of one good requires a reduction in the production of the other good.
