What do you think is the opportunity cost of moving from point B to C in terms of the butter given up to produce the extra guns? In economic terms, the negative slope is due to the presence of opportunity cost. Join now. Directions This quiz contains 15 multiple choice questions. Factors of production g. Products people desire to have 8. However, these costs are small compared to the value of the time it takes to attend class, do homework, etc. This is the currently selected item. 3. British study offers new insights on coronavirus in schools . opportunity cost—choosing to do one thing prevents us from having the opportunity to do another. Given the PPF illustrated, what is the opportunity cost of moving from B to A? I cannot work out why the opportunity cost varies along a gradient on a PPC/PPF. Geoff Riley FRSA has been teaching Economics for over thirty years. Now divide both sides by 20 to get: The O.C. Get help with your Production–possibility frontier homework. Answer Save. 1. Join now. Production Possibilities Curve as a model of a country's economy. Have a go! In the context of a PPF, opportunity cost is directly related to the shape of the curve (see below). A PPF has constant opportunity cost if the opportunity cost of a good stays the same no matter how much of it is being produced so the PPF will be a straight line (a triangle shape). c) 5/10 fish d) 10/5 coconuts. Jess will agree to clean the bathroom only if Lena vacuums the living room. 1 decade ago. Products that have an opportunity cost 6. 1. If Athletic Country currently produces 100 bats and 400 rackets, what is the opportunity cost of an additional 100 bats? Select the correct answer by clicking on the appropriate button. Log in. The opportunity cost of 20 wood is 10 food, or the OC of 20 wood = 10 food. ekonomix. Given the PPF illustrated, what is the opportunity cost of moving from B to A? The answer is economic models. Practice Questions to accompany Mankiw & Taylor: Economics 2 a. Which of the following statements is TRUE? Examiners are keen that you understand the concept of opportunity cost in relation to the PPF. Opportunity cost h. Human made resources 9. She has 8 hours a… Using data in the table, graph the ppf (with carpet on the vertical axis) b. Opportunity cost and production possibilities Juanita is a skilled toy maker who is able to produce both trucks and puzzles. Click here to get an answer to your question ️ what is opportunity cost and PPF ?? 3 tomatoes; C. 5 tomatoes; D. 8 tomatoes; E. the slope of the PPF; Correct Answer: A. Use this information to answer this set of questions. Exhibit 7 b. Question: 96. Increasing opportunity costs cause the PPF to be bowed out. Quiz Questions and Answers: Opportunity Cost and PPF Lena and Jess are roommates. Practice Questions to accompany Mankiw & Taylor: Economics 2 d. Why is her production possibilities frontier a straight line instead of bowed out like those presented in Chapter 2? Your score is neither recorded nor transmitted to your instructor. An insufficient quantity to satisfy everyone’s wants 10. For example, given a set of scarce resources, in order to produce additional “butter,” a society has to give up the opportunity to produce some “guns.” Im looking through my book and i see that i have made a note on ppfs' i wrote that "to show rising opportunity cost we must assume maximum efficiancy plus factors of production are not perfectly reallocateable" and next to ithe ppf diagram i noted "we used the best facotrs first" I understand that it has to be max. I. of 1 wood =10/20 food= .5 food. Results From Past Managerial Decisions. Answered What is opportunity cost and PPF ?? I. WHen you start production of a product, the average cost and marginal costs are very high. As you rproduce more, you … Question: An Opportunity Cost: Multiple Choice Is An Unavoidable Cost Because It Remains The Same Regardless Of The Alternative Chosen Requires A Current Outlay Of Cash. Examiners like testing the relationship between the shape of a PPF and the concept of opportunity cost. Consider the question, “How much does it cost to go to college for a year?” We could add up the direct costs like tuition, books, school supplies, etc. Ask your question. These two opportunity costs are written in units of A given up for units of T. My question is, which country would specialize in T? Lv 5. 4 Answers. A comprehensive database of opportunity cost quizzes online, test your knowledge with opportunity cost quiz questions. Lesson summary: Opportunity cost and the PPC. STRAIGHT LINE PPF AND CONSTANT OPPORTUNITY COST . a) 5 coconuts. Yes. Think of Economies of scale. c) 5/10 fish d) 10/5 coconuts. But, opportunity cost usually will vary depending on the start and end points. Exhibit 2 Answer: See Exhibit 7. Quiz on the PPC, Opportunity Cost, and the Gains from Trade. This happens because all the economy's resources are already in use, and therefore obtaining more cars would always require sacrificing some milk. 2.…the opportunity cost of increasing production of Good A from 1 unit to 2 units is the loss of _____ unit(s) of Good B. The following TWO questions refer the diagram below, which illustrates the PPF for a producer of two goods, x and y. The basic economic problem is one rooted in both the natural world and in human greed. Practice Questions 2 - Opportunity Cost and Trade Practice question with answers. 5. PPF and Opportunity Cost: The table below provides information about the production possibility frontier for Economy Z. Relevance. Favourite answer. Use the space below to answer the following question: ... the opportunity cost of increasing production of Good A from 0 units to 1 unit is the loss of _____ unit(s) of Good B. If you always set up your information like this you can easily calculate the opportunity cost for any question. 1 Answer to 1) A normal PPF exhibits ___ opportunity costs.zeroconstantdecreasingincreasing. As you can see, to move from point A to point B, society gains 40 dozen eggs at a "cost" of 200 cakes of soap, so the opportunity cost of a dozen eggs is 5 cakes of soap (200/40). Although the concept of opportunity cost is funda› mental, incorrect conclusions can result from difficul› ties in applying the concept. Production levels within the PPF are not attainable . Answer the following questions with respect to the figure below (a) The opportunity cost of moving from point b to c is 10 units of butter. Based on the PPF in the figure, the opportunity cost of producing the seventh carrot is. 2. Log in. Academic year. Explanation: A When the seventh carrot is produced, production of tomatoes goes from 10 to 8, so the opportunity cost is 2 tomatoes. Labour immobility f. Products that do not have an opportunity cost 7. b) 10 fish. Phelps to Olympians: 'Do what you can control' In leaked recording, Biden gripes about activist slogan He has over twenty years experience as Head of Economics at leading schools. Lena hates to clean the bathroom. Dayne Lee. What happens to the opportunity cost of carpets measured in number of looms as carpet production increases from 0 to 10 Million yards, from 10 to 22 Million yards, from 20 to 30 Million yards, and so on? Next lesson. Swinburne University of Technology. If the shape of the PPF curve is a straight-line, the opportunity cost is constant as production of different goods is changing. Solution for 5. Explain briefly. Sort by: Top Voted. A. This question does precisely that! In Exhibit 2, plot and connect these points to create Athletic Country's production possibilities frontier. b) 10 fish. The PPF for country 1 is 10A+30T=600 and country 2 is 30A+150T=1200 So the opportunity cost of T in country 1 is A=60-3T. Think about what happens to the opportunity cost of TLs—measured in units of yoga lessons (“YL”)—as the amount of resources devoted to producing TLs increases. tonushka tonushka 29 minutes ago Economy Secondary School +5 pts. Why does Opportunity Cost vary along a PPF Gradient? This short revision video looks at a PPF with diminishing returns (increasing marginal opportunity cost) and a linear PPF where the marginal opportunity cost is constant. Practice: Opportunity cost and the PPC. University. 2017/2018 The following TWO questions refer the diagram below, which illustrates the PPF for a producer of two goods, x and y. a) 5 coconuts. For the equation TL = 25000 - (YL)2 /1000 the derivative d(TL)/d(YL)— the amount of TLs you tradeoff by changing the number of YLs—is - (YL)/500. Which of the following statements is TRUE? And here's a quick question for you. 2 tomatoes; B. opportunity costs of each intervention to be compared. The opportunity cost of T in country 2 is A=40-5T. 2. The negative slope of the PPF illustrates the fact that larger quantities of cars correspond to a smaller amount of milk, and vice versa. Finally, a PPF has decreasing opportunity costs if the opportunity cost of a good gets smaller as more of it (this promotes specialization) and the PPF will be bowed in (like a crescent moon). Our online opportunity cost trivia quizzes can be adapted to suit your requirements for taking some of the top opportunity cost quizzes. In fact, such a movement along the PPF illustrates one of the most important concepts in microeconomics we've already briefly touched upon, the concept known as opportunity cost. This is the answer we want. PPCs for increasing, decreasing and constant opportunity cost. These are examples of explicit costs, i.e., costs that require a money payment. 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