Production Possibilities Curve & Efficiency macroeconomics

Ch.1a Homework Name_______________________ 4 pts@ score:

A factory makes combinations of ice chests and bicycle helmets by the numbers below.

A B C D E

coolers 0 21 36 45 48

helmets 12 9 6 3 0

1)Going from A to B means 21 more coolers and 3 less helmets, which equals a ratio of 7:1.

2)Going from B to C means __ more coolers and 3 less helmets, which equals a ratio of __:1.

3)Going from C to D means __ more coolers and 3 less helmets, which equals a ratio of __:1.

4)Going from D to E means __ more coolers and 3 less helmets, which equals a ratio of __:1.

(hint: writing these ratios between A B C D E is helpful)

5)______________ are easier to make or, in other words, are more abundant. Hence the other (less numerous) product ________________ is more difficult to make.

6)If coolers sell for $5 and helmets $30, then 1 helmet costs as much as __ coolers and B is the production goal worth the most money. (at B this ratio fits between 7:1 and 5:1)

7)If coolers sell for $7 each and helmets $70, then 1 helmet costs as much as __ coolers and letter __ is best.

8)If coolers sell for $12 each and helmets $24, then 1 helmet costs as much as __ coolers and letter __ is best.

9)If coolers sell for $10 each and helmets $40, then 1 helmet costs as much as __ coolers and letter __ is best.

10)If coolers sell for $20 each and helmets $16, then 1 helmet costs as much as __ of a cooler and letter __ is best.

If a pair is located at a same point, say 36 coolers & 6 helmets, or space, say 25 & 8, then such a pair is efficient. If both of the pair does not share the same gap or the same point then the pair is not efficient. If the two numbers of a pair are NOT located at the same point or gap because one of the numbers is not enough, say 35 & 5, then not having enough means inefficient. If the pair does not cohabitate in the same point or gap because one of the values is too large, say 37 & 7, then such is outside or beyond current possibilities.

1 & 10 is efficient, even if this pair is staggered both numbers are located in the same AB gap

38 & 8 out 11)25 & 10 ___ 12)47 & 0 ___ 13)0 & 11 ___

45 & 2 ineff 14)47 & 2 ___ 15)40 & 8 ___ 16)37 & 7 ___

17)21 & 9 ___ 18)13 & 7 ___ 19)40 & 5 ___ 20)5 & 10 ___

answers jumbled: A C coolers D E eff eff eff eff helmets ineff ineff ineff out out out .8 1 2 3 3 4 5 6 9 10 15