Solution Manual for Foundations of Business 7th Edition by William M. Pride, all chapter 1-47.

SOLUTION MANUAL FOR FOUNDATIONS OF BUSINESS 7TH EDITION BY
WILLIAM M. PRIDE, ALL CHAPTER 1-47




SOLUTION
MANUAL FOR
FOUNDATIONS OF
BUSINESS 7TH
EDITION BY
WILLIAM M.
PRIDE, ALL
CHAPTER 1-47

,SOLUTION MANUAL FOR FOUNDATIONS OF BUSINESS 7TH EDITION BY
WILLIAM M. PRIDE, ALL CHAPTER 1-47



Chapter 1
End Of Chapter Questions
Qui Yourself

1. Scarcity Implies That The Allocation Decision Chosen By Society Can
a) Not Make More Of Any One Good.
b) Always Make More Of Any Good.
c) Typically Make More Of One Good But At The Expense Of
Making Less Of Another.
d) Always Make More Of All Goods
Simultaneously. EXPLANATION: Scarcity Implies
That Choices Involve Trade-Offs.

Aacsb: Reflective Thinking
Accessibility: Keyboard
Navigation Blooms: Understand
Difficulty: 02 Medium
Gradeable: Automatic
Learning Objective: 01-
01
Topic: Economics And Opportunity Cost

2. A Production Possibilities Frontier Is A Simple Model Of
a) Allocating Scarce Inputs To The Production Of Alternative Outputs.
a) Price And Production/Consumption In A Market.
b) The Cost Of Producing Goods.
c) The Number Of Inputs Required To Produce Varying Levels Of Output.
EXPLANATION: The Production Possibilities Frontier Shows The
Quantity Of Two Goods That Can Be Produced. It Implies That Scarcity
Requires That Choices Be Made As To How To Use Resources.

Aacsb: Reflective Thinking
Accessibility: Keyboard
Navigation Blooms: Understand
Difficulty: 02 Medium
Gradeable: Automatic
Learning Objective: 01-
01
Topic: Modeling Opportunity Cost Using The Production Possibilities Frontier

,SOLUTION MANUAL FOR FOUNDATIONS OF BUSINESS 7TH EDITION BY
WILLIAM M. PRIDE, ALL CHAPTER 1-47


3. The Underlying Reason That There Are Unattainable Points On A
Production Possibilities Frontier Is That There
a. Is Government.
b. Are Always Choices That Must Be Made.
c. Are Scarce Resources Within A Fixed Level Of Technology.
d. Is Unemployment Of Resources.
EXPLANATION: The Points Outside The Production Possibilities Frontier
Are Unattainable. This Means That Currently Available Resources And
Technology Are Insufficient To Produce Amounts Greater Than Those
Illustrated On The Frontier. On A Graph, Everything Beyond The Frontier Is
Unattainable.

Aacsb: Reflective Thinking
Accessibility: Keyboard
Navigation Blooms: Remember
Difficulty: 01 Easy
Gradeable: Automatic
Learning Objective: 01-
01
Topic: Modeling Opportunity Cost Using The Production Possibilities Frontier

4. The Underlying Reason Production Possibilities Frontiers Are Likely
To Be Bowed Out (Rather Than Linear) Is Because
a. Choices Have Consequences.
b. There Are Always Opportunity Costs.
c. Some Resources And People Can Be Better Used Producing One
Good Rather Than Another.
d. There Is Always Some Level Of Unemployment.
EXPLANATION: If The Production Possibilities Frontier Is Not A Line But
Is Bowed Out Away From The Origin, Then Opportunity Cost Is Increasing.
The Reason For This Is That As We Add More Resources To The Production
Of, For Example, Pia, We Are Using Fewer Resources To Produce Soda.
Compounding That Problem, At Each Stage As We Take The Resources Away
From Soda And Put Them Into Pia, We Are Moving Workers Who Are Worse
At Pia Production And Better At Soda Production Than Those Moved In The
Previous Stage. This Means That The Increase In Pia Production Is
Diminishing And The Loss In Soda Production Is Increasing. An Economist
Would Call This An Example Of Increasing Opportunity Cost. If The
Production Possibilities Frontier Is A Straight Line That Is Not Bowed Out
Away From The Origin, Then Opportunity Cost Is Constant.

Aacsb: Knowledge Application
Accessibility: Keyboard
Navigation Blooms: Remember
Difficulty: 01 Easy
Gradeable: Automatic
Learning Objective: 01-
02

, SOLUTION MANUAL FOR FOUNDATIONS OF BUSINESS 7TH EDITION BY
WILLIAM M. PRIDE, ALL CHAPTER 1-47


Topic: Attributes Of The Production Possibilities Frontier