SOLUTION MANUAL FOR M M
Issues in Economics Today 10th Edition by Robert Guell
M M M M M M M M
ChapterM1-47
Chapter 1 M
End of Chapter Questions
M M M
QuizMYourself
1. ScarcityMimpliesMthatMtheMallocationMdecisionMchosenMbyMsocietyMcan
a) notMmakeMmoreMofManyMoneMgood.
b) alwaysMmakeMmoreMofManyMgood.
c) typicallyMmakeMmoreMofMoneMgoodMbutMatMtheMexpenseMofMmakingMle
ssMofManother.
d) alwaysMmakeMmoreMofMallMgoodsMsimultaneously.MEx
planation:MScarcityMimpliesMthatMchoicesMinvolveMtrade-offs.
AACSB:MReflectiveMThinkingMAccessi
bility:MKeyboardMNavigationMBlooms:M
Understand
Difficulty:M02MMediumMGrad
eable:MautomaticMLearningMO
bjective:M01-01
Topic:MEconomicsMandMOpportunityMCost
2. AMproductionMpossibilitiesMfrontierMisMaMsimpleMmodelMof
a) allocatingMscarceMinputsMtoMtheMproductionMofMalternativeMoutputs.
a) priceMandMproduction/consumptionMinMaMmarket.
b) theMcostMofMproducingMgoods.
c) theMnumberMofMinputsMrequiredMtoMproduceMvaryingMlevelsMofMoutput.M Explanat
ion:MTheMproductionMpossibilitiesMfrontierMshowsMtheMquantityMofMtwoMgoodsMthatMcanM
beMproduced.MItMimpliesMthatMscarcityMrequiresMthatMchoicesMbeMmadeMasMtoMhowMtoMuse
Mresources.
AACSB:MReflectiveMThinkingMAccessi
bility:MKeyboardMNavigationMBlooms:M
Understand
Difficulty:M02MMediumMGrad
eable:MautomaticMLearningMO
bjective:M01-01
Topic:MModelingMOpportunityMCostMUsingMtheMProductionMPossibilitiesMFrontier
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EMPRIORM WRITTENMCONSENTMOFMMCGRAWMHILLMLLC.
,3. TheMunderlyingMreasonMthatMthereMareMunattainableMpointsMonMaMproductionMpossibili
tiesMfrontierMisMthatMthere
a. isMgovernment.
b. areMalwaysMchoicesMthatMmustMbeMmade.
c. areMscarceMresourcesMwithinMaMfixedMlevelMofMtechnology.
d. isMunemploymentMofMresources.
Explanation:MTheMpointsMoutsideMtheMproductionMpossibilitiesMfrontierMareMunattainable.MT
hisMmeansMthatMcurrentlyMavailableMresourcesMandMtechnologyMareMinsufficientMtoMproduce
MamountsMgreaterMthanMthoseMillustratedMonMtheMfrontier.MOnMaMgraph,MeverythingMbeyond
MtheMfrontierMisMunattainable.
AACSB:MReflectiveMThinkingMAccessi
bility:MKeyboardMNavigationMBlooms:M
Remember
Difficulty:M01MEasyMGradeabl
e:MautomaticMLearningMObjec
tive:M01-01
Topic:MModelingMOpportunityMCostMUsingMtheMProductionMPossibilitiesMFrontier
4. TheMunderlyingMreasonMproductionMpossibilitiesMfrontiersMareMlikelyMtoMbeMbowedM
outM(ratherMthanMlinear)MisMbecause
a. choicesMhaveMconsequences.
b. thereMareMalwaysMopportunityMcosts.
c. someMresourcesMandMpeopleMcanMbeMbetterMusedMproducingMoneMgoodMrat
herMthanManother.
d. thereMisMalwaysMsomeMlevelMofMunemployment.
Explanation:MIfMtheMproductionMpossibilitiesMfrontierMisMnotMaMlineMbutMisMbowedMoutMawa
yMfromMtheMorigin,MthenMopportunityMcostMisMincreasing.MTheMreasonMforMthisMisMthatMasMw
eMaddMmoreMresourcesMtoMtheMproductionMof,MforMexample,Mpizza,MweMareMusingMfewerMres
ourcesMtoMproduceMsoda.MCompoundingMthatMproblem,MatMeachMstageMasMweMtakeMtheMreso
urcesMawayMfromMsodaMandMputMthemMintoMpizza,MweMareMmovingMworkersMwhoMareMwors
eMatMpizzaMproductionMandMbetterMatMsodaMproductionMthanMthoseMmovedMinMtheMpreviousM
stage.MThisMmeansMthatMtheMincreaseMinMpizzaMproductionMisMdiminishingMandMtheMlossMinM
sodaMproductionMisMincreasing.MAnMeconomistMwouldMcallMthisManMexampleMofMincreasing
MopportunityMcost.MIfMtheMproductionMpossibilitiesMfrontierMisMaMstraightMlineMthatMisMnotMb
owedMoutMawayMfromMtheMorigin,MthenMopportunityMcostMisMconstant.
AACSB:MKnowledgeMApplicationMAc
cessibility:MKeyboardMNavigationMBlo
oms:MRemember
Difficulty:M01MEasyMGradeabl
e:MautomaticMLearningMObjec
tive:M01-02
Topic:MAttributesMofMtheMProductionMPossibilitiesMFrontier
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EMPRIORM WRITTENMCONSENTMOFMMCGRAWMHILLMLLC.
,5. SupposeMyouMwereMmodelingMtheMimpactMofMtheMintroductionMofMcomputerMautomat
ionMintoMmanufacturingMonMaMproductionMpossibilitiesMfrontierM(PPF)MwithMtwoMmanufa
cturedMgoodsMonMtheirMrespectiveMaxes.MItMwouldMbeMmoreMlikelyMthatMtheMresultMwould
MbeM .
a) generalizedMgrowthMwithMtheMPPFMmovingMbothMupMandMtoMtheMright.
b) specializedMgrowthMwithMtheMPPFMmovingMbothMupMandMtoMtheMright.
c) generalizedMgrowthMwithMtheMPPFMjustMmovingMupMandMnotMtoMtheMright.
d) specializedMgrowthMwithMtheMPPFMjustMmovingMupMandMnotMtoMtheMright.MExpla
nation:MComputerMautomationMisMaMgeneralMimprovementMinMtechnologyMsoMitMwouldMi
mproveMallMmanufacturing.MAsMaMresult,MitMwouldMresultMinMgeneralizedMgrowthMandMm
oveMtheMPPFMbothMupMandMtoMtheMright.
AACSB:MKnowledgeMApplicationMAc
cessibility:MKeyboardMNavigationMBlo
oms:MRemember
Difficulty:M01MEasyMGradeabl
e:MautomaticMLearningMObjec
tive:M01-
03MTopic:MEconomicMGrowth
6. TheMoptimizationMassumptionMsuggestsMthatMpeopleMmake
a. irrationalMdecisions.
b. unpredictableMdecisions.
c. decisionsMtoMmakeMthemselvesMasMwellMoffMasMpossible.
d. decisionsMwithoutMthinkingMveryMhard.
Explanation:MTheMoptimizationMassumptionMsuggestsMthatMtheMpersonMinMquestionMisMtryi
ngMtoMmaximizeMsomeMobjective.MConsumersMareMassumedMtoMbeMmakingMdecisionsMthat
MmaximizeMtheirMhappinessMsubjectMtoMaMscarceMamountMofMmoney.
AACSB:MReflectiveMThinkingMAccessi
bility:MKeyboardMNavigationMBlooms:M
Remember
Difficulty:M01MEasyMGradeabl
e:MautomaticMLearningMObjec
tive:M01-01
Topic:MThinkingMEconomically
7. ImagineManMeconomistMorderingMdonutsMone-by-
one.MWhenMdecidingMhowMmanyMdonutsMtoMorderMtheyMwouldMpickMthatMnumberMwhereMth
eMenjoymentMofMtheM
equalsMtheMenjoymentMtheyMcouldMgetMfromMusingMtheMmoneyMonManotherMgood.
a. firstMdonut
b. last/marginalMdonut
c. average/typicalMdonut
d. totalMnumberMofMdonuts
Explanation:MTheMenjoymentMofMtheMlastMsliceMisMtheMmarginalMbenefitMofMthatMslice.MIfMthisMe
njoymentMisMmoreMthanMtheMenjoymentMfromMsomeMalternative,MmoreMwillMbeMconsumed.
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EMPRIORM WRITTENMCONSENTMOFMMCGRAWMHILLMLLC.
, AACSB:MReflectiveMThinking
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EMPRIORM WRITTENMCONSENTMOFMMCGRAWMHILLMLLC.
Issues in Economics Today 10th Edition by Robert Guell
M M M M M M M M
ChapterM1-47
Chapter 1 M
End of Chapter Questions
M M M
QuizMYourself
1. ScarcityMimpliesMthatMtheMallocationMdecisionMchosenMbyMsocietyMcan
a) notMmakeMmoreMofManyMoneMgood.
b) alwaysMmakeMmoreMofManyMgood.
c) typicallyMmakeMmoreMofMoneMgoodMbutMatMtheMexpenseMofMmakingMle
ssMofManother.
d) alwaysMmakeMmoreMofMallMgoodsMsimultaneously.MEx
planation:MScarcityMimpliesMthatMchoicesMinvolveMtrade-offs.
AACSB:MReflectiveMThinkingMAccessi
bility:MKeyboardMNavigationMBlooms:M
Understand
Difficulty:M02MMediumMGrad
eable:MautomaticMLearningMO
bjective:M01-01
Topic:MEconomicsMandMOpportunityMCost
2. AMproductionMpossibilitiesMfrontierMisMaMsimpleMmodelMof
a) allocatingMscarceMinputsMtoMtheMproductionMofMalternativeMoutputs.
a) priceMandMproduction/consumptionMinMaMmarket.
b) theMcostMofMproducingMgoods.
c) theMnumberMofMinputsMrequiredMtoMproduceMvaryingMlevelsMofMoutput.M Explanat
ion:MTheMproductionMpossibilitiesMfrontierMshowsMtheMquantityMofMtwoMgoodsMthatMcanM
beMproduced.MItMimpliesMthatMscarcityMrequiresMthatMchoicesMbeMmadeMasMtoMhowMtoMuse
Mresources.
AACSB:MReflectiveMThinkingMAccessi
bility:MKeyboardMNavigationMBlooms:M
Understand
Difficulty:M02MMediumMGrad
eable:MautomaticMLearningMO
bjective:M01-01
Topic:MModelingMOpportunityMCostMUsingMtheMProductionMPossibilitiesMFrontier
PageM1
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EMPRIORM WRITTENMCONSENTMOFMMCGRAWMHILLMLLC.
,3. TheMunderlyingMreasonMthatMthereMareMunattainableMpointsMonMaMproductionMpossibili
tiesMfrontierMisMthatMthere
a. isMgovernment.
b. areMalwaysMchoicesMthatMmustMbeMmade.
c. areMscarceMresourcesMwithinMaMfixedMlevelMofMtechnology.
d. isMunemploymentMofMresources.
Explanation:MTheMpointsMoutsideMtheMproductionMpossibilitiesMfrontierMareMunattainable.MT
hisMmeansMthatMcurrentlyMavailableMresourcesMandMtechnologyMareMinsufficientMtoMproduce
MamountsMgreaterMthanMthoseMillustratedMonMtheMfrontier.MOnMaMgraph,MeverythingMbeyond
MtheMfrontierMisMunattainable.
AACSB:MReflectiveMThinkingMAccessi
bility:MKeyboardMNavigationMBlooms:M
Remember
Difficulty:M01MEasyMGradeabl
e:MautomaticMLearningMObjec
tive:M01-01
Topic:MModelingMOpportunityMCostMUsingMtheMProductionMPossibilitiesMFrontier
4. TheMunderlyingMreasonMproductionMpossibilitiesMfrontiersMareMlikelyMtoMbeMbowedM
outM(ratherMthanMlinear)MisMbecause
a. choicesMhaveMconsequences.
b. thereMareMalwaysMopportunityMcosts.
c. someMresourcesMandMpeopleMcanMbeMbetterMusedMproducingMoneMgoodMrat
herMthanManother.
d. thereMisMalwaysMsomeMlevelMofMunemployment.
Explanation:MIfMtheMproductionMpossibilitiesMfrontierMisMnotMaMlineMbutMisMbowedMoutMawa
yMfromMtheMorigin,MthenMopportunityMcostMisMincreasing.MTheMreasonMforMthisMisMthatMasMw
eMaddMmoreMresourcesMtoMtheMproductionMof,MforMexample,Mpizza,MweMareMusingMfewerMres
ourcesMtoMproduceMsoda.MCompoundingMthatMproblem,MatMeachMstageMasMweMtakeMtheMreso
urcesMawayMfromMsodaMandMputMthemMintoMpizza,MweMareMmovingMworkersMwhoMareMwors
eMatMpizzaMproductionMandMbetterMatMsodaMproductionMthanMthoseMmovedMinMtheMpreviousM
stage.MThisMmeansMthatMtheMincreaseMinMpizzaMproductionMisMdiminishingMandMtheMlossMinM
sodaMproductionMisMincreasing.MAnMeconomistMwouldMcallMthisManMexampleMofMincreasing
MopportunityMcost.MIfMtheMproductionMpossibilitiesMfrontierMisMaMstraightMlineMthatMisMnotMb
owedMoutMawayMfromMtheMorigin,MthenMopportunityMcostMisMconstant.
AACSB:MKnowledgeMApplicationMAc
cessibility:MKeyboardMNavigationMBlo
oms:MRemember
Difficulty:M01MEasyMGradeabl
e:MautomaticMLearningMObjec
tive:M01-02
Topic:MAttributesMofMtheMProductionMPossibilitiesMFrontier
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©MMCGRAWMHILLMLLC.MALLMRIGHTSMRESERVED.MNOMREPRODUCTIONMORMDISTRIBUTIONMWITHOUTMTH
EMPRIORM WRITTENMCONSENTMOFMMCGRAWMHILLMLLC.
,5. SupposeMyouMwereMmodelingMtheMimpactMofMtheMintroductionMofMcomputerMautomat
ionMintoMmanufacturingMonMaMproductionMpossibilitiesMfrontierM(PPF)MwithMtwoMmanufa
cturedMgoodsMonMtheirMrespectiveMaxes.MItMwouldMbeMmoreMlikelyMthatMtheMresultMwould
MbeM .
a) generalizedMgrowthMwithMtheMPPFMmovingMbothMupMandMtoMtheMright.
b) specializedMgrowthMwithMtheMPPFMmovingMbothMupMandMtoMtheMright.
c) generalizedMgrowthMwithMtheMPPFMjustMmovingMupMandMnotMtoMtheMright.
d) specializedMgrowthMwithMtheMPPFMjustMmovingMupMandMnotMtoMtheMright.MExpla
nation:MComputerMautomationMisMaMgeneralMimprovementMinMtechnologyMsoMitMwouldMi
mproveMallMmanufacturing.MAsMaMresult,MitMwouldMresultMinMgeneralizedMgrowthMandMm
oveMtheMPPFMbothMupMandMtoMtheMright.
AACSB:MKnowledgeMApplicationMAc
cessibility:MKeyboardMNavigationMBlo
oms:MRemember
Difficulty:M01MEasyMGradeabl
e:MautomaticMLearningMObjec
tive:M01-
03MTopic:MEconomicMGrowth
6. TheMoptimizationMassumptionMsuggestsMthatMpeopleMmake
a. irrationalMdecisions.
b. unpredictableMdecisions.
c. decisionsMtoMmakeMthemselvesMasMwellMoffMasMpossible.
d. decisionsMwithoutMthinkingMveryMhard.
Explanation:MTheMoptimizationMassumptionMsuggestsMthatMtheMpersonMinMquestionMisMtryi
ngMtoMmaximizeMsomeMobjective.MConsumersMareMassumedMtoMbeMmakingMdecisionsMthat
MmaximizeMtheirMhappinessMsubjectMtoMaMscarceMamountMofMmoney.
AACSB:MReflectiveMThinkingMAccessi
bility:MKeyboardMNavigationMBlooms:M
Remember
Difficulty:M01MEasyMGradeabl
e:MautomaticMLearningMObjec
tive:M01-01
Topic:MThinkingMEconomically
7. ImagineManMeconomistMorderingMdonutsMone-by-
one.MWhenMdecidingMhowMmanyMdonutsMtoMorderMtheyMwouldMpickMthatMnumberMwhereMth
eMenjoymentMofMtheM
equalsMtheMenjoymentMtheyMcouldMgetMfromMusingMtheMmoneyMonManotherMgood.
a. firstMdonut
b. last/marginalMdonut
c. average/typicalMdonut
d. totalMnumberMofMdonuts
Explanation:MTheMenjoymentMofMtheMlastMsliceMisMtheMmarginalMbenefitMofMthatMslice.MIfMthisMe
njoymentMisMmoreMthanMtheMenjoymentMfromMsomeMalternative,MmoreMwillMbeMconsumed.
PageM3
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EMPRIORM WRITTENMCONSENTMOFMMCGRAWMHILLMLLC.
, AACSB:MReflectiveMThinking
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