SOLUTION MANUAL FOR mm mm
Issues in Economics Today 10th Edition by Robert Guell
mm mm mm mm mm mm mm mm
Chapter mm1-47
Chapter 1 mm
End of Chapter Questions
mm mm mm
Quiz m m Yourself
1. Scarcity mmimplies m m that m m the m m allocation m m decision m m chosen m m by mmsociety mmcan
a) not m m make m m more m m of m m any mmone m m good.
b) always mm make mm more mm of m m any mm good.
c) typically mmmake mmmore mmof mmone mmgood mmbut mmat mmthe mmexpense mmof
mmmaking mmless mmof mmanother.
d) always mmmake mmmore mmof mmall mmgoods
mmsimultaneously. mmExplanation: mmScarcitymmimplies mmthat
mmchoices mminvolve mmtrade- mmoffs.
AACSB: mmReflective mmThinking
mmAccessibility: mmKeyboard
mmNavigation mmBlooms: mmUnderstand
Difficulty: mm02 mmMedium
mmGradeable: mmautomatic
mmLearningmmObjective:
mm01-01
Topic: m m Economics m m and m m Opportunity mmCost
2. A mmproduction m m possibilities m m frontier mm is m m a mm simple m m model m m of
a) allocating mm scarce m m inputs m m to mm the mm production m m of m m alternative m m outputs.
a) price mm and m m production/consumption m m in m m a m m market.
b) the m m cost m m of m m producing m m goods.
c) the mmnumber mmof mminputs mmrequired mmto mmproduce mmvarying mmlevels mmof mmoutput.
mmExplanation: mmThe mmproduction mmpossibilities mmfrontier mmshows mmthe mmquantity mmof
mmtwo mmgoods mmthat mmcan mmbe mmproduced. mmIt mmimplies mmthat mmscarcity mmrequires mmthat
mmchoices mmbe mmmade mmas mmto mmhow mmto mmuse mmresources.
AACSB: mmReflective mmThinking
mmAccessibility: mmKeyboard
mmNavigation mmBlooms: mmUnderstand
Difficulty: mm02 mmMedium
mmGradeable: mmautomatic
mmLearningmmObjective:
Page mm 1
© m m MCGRAW mmHILL m m LLC. m m ALL mmRIGHTS m m RESERVED. mmNO mmREPRODUCTION m m OR
m m DISTRIBUTION m m WITHOUT mmTHE m m PRIOR WRITTEN m m CONSENT m m OF m m MCGRAW
HILL LLC.
,mm01-01
Topic: mm Modeling mm Opportunity mmCost m m Using mmthe m m Production m m Possibilities m m Frontier
Page mm 2
© m m MCGRAW mmHILL m m LLC. m m ALL mmRIGHTS m m RESERVED. mmNO mmREPRODUCTION m m OR
m m DISTRIBUTION m m WITHOUT mmTHE m m PRIOR WRITTEN m m CONSENT m m OF m m MCGRAW
HILL LLC.
,3. The mmunderlying mmreason mmthat mmthere mmare mmunattainable mmpoints mmon mma
mmproduction mmpossibilities mmfrontier mmis mmthat mmthere
a. is m m government.
b. are mm always m m choices m m that m m must m m be m m made.
c. are mmscarce m m resources m m within m m a mmfixed m m level m m of m m technology.
d. is mm unemployment mm of m m resources.
Explanation: mmThe mmpoints mmoutside mmthe mmproduction mmpossibilities mmfrontier mmare
mmunattainable. mmThis mmmeans mmthat mmcurrently mmavailable mmresources mmand mmtechnology
mmare mminsufficient mmto mmproduce mmamounts mmgreater mmthan mmthose mmillustrated mmon mmthe
mmfrontier. mmOn mma mmgraph, mmeverything mmbeyond mmthe mmfrontier mmis mmunattainable.
AACSB: mmReflective mmThinking
mmAccessibility: mmKeyboard
mmNavigation mmBlooms: mmRemember
Difficulty: mm01 mmEasy
mmGradeable: mmautomatic
mmLearningmmObjective:
mm01-01
Topic: mm Modeling mm Opportunity mmCost m m Using mmthe m m Production m m Possibilities m m Frontier
4. The mmunderlying mmreason mmproduction mmpossibilities mmfrontiers mmare mmlikelymmto
mmbe mmbowed mmout mm(rather mmthan mmlinear) mmis mmbecause
a. choices m m have mm consequences.
b. there m m are m m always m m opportunity mmcosts.
c. some mmresources mmand mmpeople mmcan mmbe mmbetter mmused mmproducing
mmone mmgood mmrather mmthan mmanother.
d. there mmis m m always m m some mm level m m of m m unemployment.
Explanation: mmIf mmthe mmproduction mmpossibilities mmfrontier mmis mmnot mma mmline mmbut mmis
mmbowed mmout mmaway mmfrom mmthe m m origin, m m then m m opportunity mmcost m m is mmincreasing.
m m The m m reason m m for m m this m m is m m that mmas m m we mmadd mmmore mmresources mmto mmthe
mmproduction mmof, mmfor mmexample, mmpizza, mmwe mmare mmusing mmfewer mmresources mmto
mmproduce mmsoda. mmCompounding mmthat mmproblem, mmat mmeach mmstage mmas mmwe mmtake mmthe
mmresources mmaway mmfrom mmsoda mmand mmput mmthem mminto mmpizza, mmwe mmare mmmoving
mmworkers mmwho mmare mmworse mmat mmpizza mmproduction mmand mmbetter mmat mmsoda
mmproduction mmthan mmthose mmmoved mmin mmthe m m previous mmstage. mmThis mmmeans mmthat
mmthe mmincrease mmin mmpizza mmproduction mmis mmdiminishing mmand mmthe mmloss mmin mmsoda
mmproduction mmis mmincreasing. mmAn mmeconomist mmwould mmcall mmthis mman mmexample mmof
mmincreasing mmopportunity mmcost. mmIf mmthe mmproduction mmpossibilities mmfrontier mmis mma
mmstraight mmline mmthat m m is mmnot mmbowed mmout mmaway mmfrom mmthe mmorigin, mmthen
mmopportunity mmcost mmis mmconstant.
AACSB: mmKnowledge mmApplication
mmAccessibility: mmKeyboard
mmNavigation mmBlooms: mmRemember
Difficulty: mm01 mmEasy
mmGradeable: mmautomatic
mmLearningmmObjective:
Page mm 3
© m m MCGRAW mmHILL m m LLC. m m ALL mmRIGHTS m m RESERVED. mmNO mmREPRODUCTION m m OR
m m DISTRIBUTION m m WITHOUT mmTHE m m PRIOR WRITTEN m m CONSENT m m OF m m MCGRAW
HILL LLC.
, 01-02
mm
Topic: m m Attributes m m of mm the mm Production m m Possibilities mm Frontier
Page mm 4
© m m MCGRAW mmHILL m m LLC. m m ALL mmRIGHTS m m RESERVED. mmNO mmREPRODUCTION m m OR
m m DISTRIBUTION m m WITHOUT mmTHE m m PRIOR WRITTEN m m CONSENT m m OF m m MCGRAW
HILL LLC.
Issues in Economics Today 10th Edition by Robert Guell
mm mm mm mm mm mm mm mm
Chapter mm1-47
Chapter 1 mm
End of Chapter Questions
mm mm mm
Quiz m m Yourself
1. Scarcity mmimplies m m that m m the m m allocation m m decision m m chosen m m by mmsociety mmcan
a) not m m make m m more m m of m m any mmone m m good.
b) always mm make mm more mm of m m any mm good.
c) typically mmmake mmmore mmof mmone mmgood mmbut mmat mmthe mmexpense mmof
mmmaking mmless mmof mmanother.
d) always mmmake mmmore mmof mmall mmgoods
mmsimultaneously. mmExplanation: mmScarcitymmimplies mmthat
mmchoices mminvolve mmtrade- mmoffs.
AACSB: mmReflective mmThinking
mmAccessibility: mmKeyboard
mmNavigation mmBlooms: mmUnderstand
Difficulty: mm02 mmMedium
mmGradeable: mmautomatic
mmLearningmmObjective:
mm01-01
Topic: m m Economics m m and m m Opportunity mmCost
2. A mmproduction m m possibilities m m frontier mm is m m a mm simple m m model m m of
a) allocating mm scarce m m inputs m m to mm the mm production m m of m m alternative m m outputs.
a) price mm and m m production/consumption m m in m m a m m market.
b) the m m cost m m of m m producing m m goods.
c) the mmnumber mmof mminputs mmrequired mmto mmproduce mmvarying mmlevels mmof mmoutput.
mmExplanation: mmThe mmproduction mmpossibilities mmfrontier mmshows mmthe mmquantity mmof
mmtwo mmgoods mmthat mmcan mmbe mmproduced. mmIt mmimplies mmthat mmscarcity mmrequires mmthat
mmchoices mmbe mmmade mmas mmto mmhow mmto mmuse mmresources.
AACSB: mmReflective mmThinking
mmAccessibility: mmKeyboard
mmNavigation mmBlooms: mmUnderstand
Difficulty: mm02 mmMedium
mmGradeable: mmautomatic
mmLearningmmObjective:
Page mm 1
© m m MCGRAW mmHILL m m LLC. m m ALL mmRIGHTS m m RESERVED. mmNO mmREPRODUCTION m m OR
m m DISTRIBUTION m m WITHOUT mmTHE m m PRIOR WRITTEN m m CONSENT m m OF m m MCGRAW
HILL LLC.
,mm01-01
Topic: mm Modeling mm Opportunity mmCost m m Using mmthe m m Production m m Possibilities m m Frontier
Page mm 2
© m m MCGRAW mmHILL m m LLC. m m ALL mmRIGHTS m m RESERVED. mmNO mmREPRODUCTION m m OR
m m DISTRIBUTION m m WITHOUT mmTHE m m PRIOR WRITTEN m m CONSENT m m OF m m MCGRAW
HILL LLC.
,3. The mmunderlying mmreason mmthat mmthere mmare mmunattainable mmpoints mmon mma
mmproduction mmpossibilities mmfrontier mmis mmthat mmthere
a. is m m government.
b. are mm always m m choices m m that m m must m m be m m made.
c. are mmscarce m m resources m m within m m a mmfixed m m level m m of m m technology.
d. is mm unemployment mm of m m resources.
Explanation: mmThe mmpoints mmoutside mmthe mmproduction mmpossibilities mmfrontier mmare
mmunattainable. mmThis mmmeans mmthat mmcurrently mmavailable mmresources mmand mmtechnology
mmare mminsufficient mmto mmproduce mmamounts mmgreater mmthan mmthose mmillustrated mmon mmthe
mmfrontier. mmOn mma mmgraph, mmeverything mmbeyond mmthe mmfrontier mmis mmunattainable.
AACSB: mmReflective mmThinking
mmAccessibility: mmKeyboard
mmNavigation mmBlooms: mmRemember
Difficulty: mm01 mmEasy
mmGradeable: mmautomatic
mmLearningmmObjective:
mm01-01
Topic: mm Modeling mm Opportunity mmCost m m Using mmthe m m Production m m Possibilities m m Frontier
4. The mmunderlying mmreason mmproduction mmpossibilities mmfrontiers mmare mmlikelymmto
mmbe mmbowed mmout mm(rather mmthan mmlinear) mmis mmbecause
a. choices m m have mm consequences.
b. there m m are m m always m m opportunity mmcosts.
c. some mmresources mmand mmpeople mmcan mmbe mmbetter mmused mmproducing
mmone mmgood mmrather mmthan mmanother.
d. there mmis m m always m m some mm level m m of m m unemployment.
Explanation: mmIf mmthe mmproduction mmpossibilities mmfrontier mmis mmnot mma mmline mmbut mmis
mmbowed mmout mmaway mmfrom mmthe m m origin, m m then m m opportunity mmcost m m is mmincreasing.
m m The m m reason m m for m m this m m is m m that mmas m m we mmadd mmmore mmresources mmto mmthe
mmproduction mmof, mmfor mmexample, mmpizza, mmwe mmare mmusing mmfewer mmresources mmto
mmproduce mmsoda. mmCompounding mmthat mmproblem, mmat mmeach mmstage mmas mmwe mmtake mmthe
mmresources mmaway mmfrom mmsoda mmand mmput mmthem mminto mmpizza, mmwe mmare mmmoving
mmworkers mmwho mmare mmworse mmat mmpizza mmproduction mmand mmbetter mmat mmsoda
mmproduction mmthan mmthose mmmoved mmin mmthe m m previous mmstage. mmThis mmmeans mmthat
mmthe mmincrease mmin mmpizza mmproduction mmis mmdiminishing mmand mmthe mmloss mmin mmsoda
mmproduction mmis mmincreasing. mmAn mmeconomist mmwould mmcall mmthis mman mmexample mmof
mmincreasing mmopportunity mmcost. mmIf mmthe mmproduction mmpossibilities mmfrontier mmis mma
mmstraight mmline mmthat m m is mmnot mmbowed mmout mmaway mmfrom mmthe mmorigin, mmthen
mmopportunity mmcost mmis mmconstant.
AACSB: mmKnowledge mmApplication
mmAccessibility: mmKeyboard
mmNavigation mmBlooms: mmRemember
Difficulty: mm01 mmEasy
mmGradeable: mmautomatic
mmLearningmmObjective:
Page mm 3
© m m MCGRAW mmHILL m m LLC. m m ALL mmRIGHTS m m RESERVED. mmNO mmREPRODUCTION m m OR
m m DISTRIBUTION m m WITHOUT mmTHE m m PRIOR WRITTEN m m CONSENT m m OF m m MCGRAW
HILL LLC.
, 01-02
mm
Topic: m m Attributes m m of mm the mm Production m m Possibilities mm Frontier
Page mm 4
© m m MCGRAW mmHILL m m LLC. m m ALL mmRIGHTS m m RESERVED. mmNO mmREPRODUCTION m m OR
m m DISTRIBUTION m m WITHOUT mmTHE m m PRIOR WRITTEN m m CONSENT m m OF m m MCGRAW
HILL LLC.
