Solution Manual For Microeconomics, 17th Edition by Christopher T.S. Ragan

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Microeconomics,g5eg(Hubbard/O'Brien)
Chapterg2g Trade-offs,gComparativegAdvantage,gandgthegMarketgSystem

2.1 ProductiongPossibilitiesgFrontiersgandgOpportunitygCosts

1) Scarcity
A) stemsgfromgthegincompatibilitygbetweenglimitedgresourcesgandgunlimitedgwants.
B) cangbegovercomegbygdiscoveringgnewgresources.
C) cangbegeliminatedgbygrationinggproducts.
D) isgagbiggergproblemgingmarketgeconomiesgthangingsocialistgeconomies
.gAnswer:g A
Diff:g2
PagegRef:g38
gTopic:g Scarcity
*:g Recurring
LearninggOutcome:g Micro-
1:gIdentifygthegbasicgprinciplesgofgeconomicsgandgexplainghowgtogthinkglikegangeconomist.
AACSB:g Analyticgthinking
gSpecialgFeature:g None


2) TeslagMotorsgmanufacturersgitsgcarsgatgagplantgingFremont,gCalifornia.gAtgthisgplant,gTeslagisg
ablegtogtakegadvantagegofgtheghighglevelgofgtechnicalgtraininggpossessedgbygitsgAmericangworker
s,gbutgitgalsogsacrificesgthegabilitygtogpayglowergwagesghadgitgchosengtogopengitsgplantgingaglow-
wagegcountrygsuchgasgMexico,gIndia,gorgChina.gIngdecidinggtogopengthegFremontgplant,gTesla
A) facedgnogtrade-offsgbecausegemployinggmoregtechnically-skilledgworkersgincreasedgefficiency.
B) facedgagtrade-offgbetweenghighergcostgandglowergprecision.
C) adoptedgagnegativegtechnologicalgchangegbecausegitgchoseghigh-skilledgworkersgoverglow-
paidgworkers.
D) erodedgsomegofgitsgcompetitivenessgingthegluxurygelectricgcargmarketgbecausegofgitsgincrease
dgcostgofgproduction.
Answer:g B
Diff:g2
PagegRef:g37gT
opic:g OpportunitygCost
LearninggOutcome:g Micro-
3:gDiscussgdifferentgtypesgofgmarketgsystemsgandgtheggainsgthatgcangbegmadegfromgtrade.
AACSB:g Analyticgthinking
SpecialgFeature:g ChaptergOpener:gManagersgatgTeslagMotorsgFacegTrade-Offs




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3) Thegprinciplegofgopportunitygcostgisgthat
A) ingagmarketgeconomy,gtakinggadvantagegofgprofitablegopportunitiesginvolvesgsomegmoneygcost
.
B) thegeconomicgcostgofgusinggagfactorgofgproductiongisgthegalternativegusegofgthatgfactorgthatg
isggivengup.
C) takinggadvantagegofginvestmentgopportunitiesginvolvesgcosts.
D) thegcostgofgproductiongvariesgdependinggongthegopportunitygforgtechnologicalgapplicatio
n.gAnswer:g B
Diff:g2
PagegRef:g39gT
opic:g OpportunitygCost
*:g Recurring
LearninggOutcome:g Micro-
1:gIdentifygthegbasicgprinciplesgofgeconomicsgandgexplainghowgtogthinkglikegangeconomist.
AACSB:g Analyticgthinking
gSpecialgFeature:g None


4) Thegproductiongpossibilitiesgfrontiergshowsgtheg
combinationsgofgtwogproductsgthatgmaygbegproducedgingagparticulargtimegperiodgwithgavaila
blegresources.
A) minimumgattainable
B) maximumgattainable
C) only
D) equitable
gAnswer:g B
Diff:g2 PagegRef:g38
Topic:g ProductiongPossibilitiesgFrontiers
*:g Recurring
LearninggOutcome:g Micro-
3:gDiscussgdifferentgtypesgofgmarketgsystemsgandgtheggainsgthatgcangbegmadegfromgtrade.
AACSB:g Analyticgthinking
gSpecialgFeature:g None


5) Thegproductiongpossibilitiesgfrontiergmodelgshowsgthat
A) ifgconsumersgdecidegtogbuygmoregofgagproductgitsgpricegwillgincrease.
B) agmarketgeconomygisgmoregefficientgingproducingggoodsgandgservicesgthangisgagcentrall
ygplannedgeconomy.
C) economicggrowthgcangonlygbegachievedgbygfreegmarketgeconomies.
D) ifgallgresourcesgaregfullygandgefficientlygutilized,gmoregofgoneggoodgcangbegproducedgonlygb
ygproducingglessgofganotherggood.
Answer:g D
Diff:g2 PagegRef:g38
Topic:g ProductiongPossibilitiesgFrontiers
*:g Recurring
LearninggOutcome:g Micro-
3:gDiscussgdifferentgtypesgofgmarketgsystemsgandgtheggainsgthatgcangbegmadegfromgtrade.
AACSB:g Analyticgthinking
gSpecialgFeature:g None


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6) Thegproductiongpossibilitiesgfrontiergmodelgassumesgwhichgofgthegfollowing?
A) Labor,gcapital,glandgandgnaturalgresourcesgaregunlimitedgingquantity.
B) Thegeconomygproducesgonlygtwogproducts.
C) Anyglevelgofgthegtwogproductsgthatgthegeconomygproducesgisgcurrentlygpossible.
D) Theglevelgofgtechnologygisgvariable
.gAnswer:g B
Diff:g2 PagegRef:g38
Topic:g ProductiongPossibilitiesgFrontiers
*:g Recurring
LearninggOutcome:g Micro-
3:gDiscussgdifferentgtypesgofgmarketgsystemsgandgtheggainsgthatgcangbegmadegfromgtrade.
AACSB:g Analyticgthinking
gSpecialgFeature:g None


7) Thegattainablegproductiongpointsgongagproductiongpossibilitygcurvegare
A) theghorizontalgandgverticalgintercepts.
B) thegpointsgalonggthegproductiongpossibilitiesgfrontier.
C) thegpointsgoutsidegthegareagenclosedgbygthegproductiongpossibilitiesgfrontier.
D) thegpointsgalonggandginsidegthegproductiongpossibilitygfrontier
.gAnswer:g D
Diff:g2 PagegRef:g38
Topic:g ProductiongPossibilitiesgFrontiers
*:g Recurring
LearninggOutcome:g Micro-
3:gDiscussgdifferentgtypesgofgmarketgsystemsgandgtheggainsgthatgcangbegmadegfromgtrade.
AACSB:g Analyticgthinking
gSpecialgFeature:g None


8) Thegpointsgoutsidegthegproductiongpossibilitiesgfrontiergare
A) efficient.
B) attainable.
C) inefficient.
D) unattainable.
gAnswer:g D
Diff:g2 PagegRef:g39
Topic:g ProductiongPossibilitiesgFrontiers
*:g Recurring
LearninggOutcome:g Micro-
3:gDiscussgdifferentgtypesgofgmarketgsystemsgandgtheggainsgthatgcangbegmadegfromgtrade.
AACSB:g Analyticgthinking
gSpecialgFeature:g None




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Figureg2-1




9) RefergtogFigureg2-1.gPointgAgis
A) technicallygefficient.
B) unattainablegwithgcurrentgresources.
C) inefficientgingthatgnotgallgresourcesgaregbeinggused.
D) thegequilibriumgoutputgcombination.
gAnswer:g C
Diff:g1 PagegRef:g39
Topic:g ProductiongPossibilitiesgFrontiers
*:g Recurring
LearninggOutcome:g Micro-
2:gInterpretgandganalyzeginformationgpresentedgingdifferentgtypesgofggraphs.
AACSB:g Analyticgthinking
gSpecialgFeature:g None


10) RefergtogFigureg2-1.gPointgBgis
A) technicallygefficient.
B) unattainablegwithgcurrentgresources.
C) inefficientgingthatgnotgallgresourcesgaregbeinggused.
D) thegequilibriumgoutputgcombination.
gAnswer:g A
Diff:g1 PagegRef:g39
Topic:g ProductiongPossibilitiesgFrontiers
*:g Recurring
LearninggOutcome:g Micro-
2:gInterpretgandganalyzeginformationgpresentedgingdifferentgtypesgofggraphs.
AACSB:g Analyticgthinking
gSpecialgFeature:g None




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