Chapter 2 Assignment Economics Name: PPC - what you are giving, Combination Fruit Candy A 1500 0 B 1350 100 C 1100 175 800 225 E 450 F 350 0 500 Use the table to answer questions 1 and 2. 1. What is the opportunity cost of producing 800 tons of fruit instead of 450 tons? a. There is no opportunity cost; if you're comparing fruit only b. 125 pieces of candy - if you increase candy production c. Four pieces of candy. d. 50 pieces of candy 2. What is the opportunity cost of producing 175 pieces of candy instead of 100? Eight tons of fruit for every additional piece of candy. 250 tons of fruit C. The amount of fruit that must be given up for the additional candy d. All of the above. 3. In production possibility frontier analysis, which mixes of goods are considered efficient by an economy? a. Only those mixes falling on the PPF curve b . Those mixes on, or to the left of, the PPF c. Those mixes on, or to the right of, the PPF curve only those mixes falling to the left of the PPF curve True or False. An increase in the quality of education will cause an increase in the production possibilities curve. 5. A production possibilities curve: a. Eliminates the need to make choices regarding the use of resources b. Can be drawn for an economy but not for an individual c. Shows the different combinations of goods that can be produced d. Shows the different combinations of inputs that can be used to produce a good 6. In the production possibilities model, economic decay is illustrated by: a .) An inward shift of the production possibilities curve b . An outward shift of the production possibilities curve C . The downward slope of the production possibilities curve d. Moving from a point inside the current production possibilities curve to a point on the current production possibilities curve 7. All of the following would be expected to cause an economy's production possibilities curve to shift outward except:a. An increase in the economy's stock of capital goods b. A more productive labor force c. A reduction in the economy's rate of unemployment d. Improved production technology Use the production possibilities schedule below to answer the following questions. Tennis Shoes DVDs United States 10,000 20,000 Great Britain 5,000 15,000 8. What is the opportunity cost for Britain producing tennis shoes compared to DVDs? a. b. 3 C. 2 d. 9. What is the opportunity cost for the United States producing DVDs compared to tennis shoes? a. 2/3 b. 3 C. d. 10. Paula can design one web page in 20 minutes. She can repair one bicycle in 10 minutes. Beth can design one web page in 30 minutes and repair one bicycle in 30 minutes. a. Who has a comparative advantage in creating web pages? b. Who has a comparative advantage in repairing bicycles? Who has an absolute advantage in both activities? d. If the town demanded 20 web pages per day, and Paula devoted half of her 8 hour day creating web pages and half of her day repairing bicycles, how many web pages would she create and how many bicycles would she repair? How much time would it take Beth to complete the remaining web pages, and how many bicycles would she repair in the time remaining? 11. Kate can wax 2 cars per day or wash 6 cars. Jack can wax 2 cars per day or wash 4 cars. Who has a comparative advantage in washing cars? What is the opportunity of washing cars? 12. Taylor and Bobby are auto mechanics. Taylor takes 12 hours to replace an engine and 4 hours to replace a set of brakes. Bobby takes 8 hours to replace an engine and 4 hours to replace a set of brakes. State whether anyone has an absolute advantage at either task and, for each task, identify who has a comparative advantage