Solution aII!l Manual Foundations aII!l of a Business 7thl Edition by Williaml M. Pride, All chapter 1 - 47 a

Solution Manual aII!l




Foundations of Business 7th Edition
aII!l aII!l aII!l aII!l aII!l




by William M. Pride, All chapter 1 - 47
aII!l aII!l aII!l aII!l aII!l aII!l aII!l aII!l aII!l

,Chapter 1 aII!l




End of Chapter Questions
aII!l aII!l aII!l




Quiz a Yourself II!l




1. Scarcity a implies a that a the a allocation a decision a chosen a by a society a can
II!l II!l II!l II!l II!l II!l II!l II!l II!l



a) not a make a more a of a any a one a good. II!l II!l II!l II!l II!l II!l



b) always a make a more a of a any a good. II!l II!l II!l II!l II!l



c) typically a make a more a of a one a good a but a at a the a expense a of II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



a making a less a of a another.
II!l II!l II!l II!l



d) always a make a more a of a all a goods II!l II!l II!l II!l II!l



a simultaneously. a Explanation: a Scarcity a implies a that
II!l II!l II!l II!l II!l



a choices a involve a trade-offs.
II!l II!l II!l




AACSB: a Reflective a Thinking II!l II!l



a Accessibility: a Keyboard a Navigation
II!l I!l I!l



a Blooms: a Understand
II!l II!l



Difficulty: a 02 a Medium II!l II!l



a Gradeable: a automatic
II!l II!l



a Learning a Objective: a 01-01
II!l I!l I!l



Topic: a Economics a and a Opportunity a Cost
II!l II!l II!l II!l




2. A a production a possibilities a frontier a is a a a simple a model a of
II!l II!l II!l II!l II!l II!l II!l II!l



a) allocating a scarce a inputs a to a the a production a of a alternative a outputs. II!l II!l II!l II!l II!l II!l II!l II!l



a) price a and a production/consumption a in a a a market. II!l II!l II!l II!l II!l



b) the a cost a of a producing a goods. II!l II!l II!l II!l



c) the a number a of a inputs a required a to a produce a varying a levels a of a output.
II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



a Explanation: a The a production a possibilities a frontier a shows a the a quantity a of a two
I I ! l II!l II!l II!l II!l II!l II!l II!l II!l II!l



a goods a that a can a be a produced. a It a implies a that a scarcity a requires a that a choices
II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



a be a made a as a to a how a to a use a resources.
II!l II!l II!l II!l II!l II!l II!l II!l




AACSB: a Reflective a Thinking II!l II!l



a Accessibility: a Keyboard a Navigation
II!l I!l I!l



a Blooms: a Understand
II!l II!l



Difficulty: a 02 a Medium II!l II!l



a Gradeable: a automatic
II!l II!l



a Learning a Objective: a 01-01
II!l I!l I!l



Topic: a Modeling a Opportunity a Cost a Using a the a Production a Possibilities a Frontier
II!l II!l II!l II!l II!l II!l II!l II!l

,3. The a underlying a reason a that a there a are a unattainable a points a on a a a production
II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



a possibilities a frontier a is a that a there
II!l II!l II!l II!l II!l



a. is a government. II!l



b. are a always a choices a that a must a be a made.II!l II!l II!l II!l II!l II!l



c. are a scarce a resources a within a a a fixed a level a of a technology.
II!l II!l II!l II!l II!l II!l II!l II!l



d. is a unemployment a of a resources. II!l II!l II!l



Explanation: a The a points a outside a the a production a possibilities a frontier a are
II!l II!l II!l II!l II!l II!l II!l II!l



a unattainable. a This a means a that a currently a available a resources a and a technology a are
II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



a insufficient a to a produce a amounts a greater a than a those a illustrated a on a the a frontier.
II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



a On a a a graph, a everything a beyond a the a frontier a is a unattainable.
II!l II!l II!l II!l II!l II!l II!l II!l II!l




AACSB: a Reflective a Thinking II!l II!l



a Accessibility: a Keyboard a Navigation
II!l I!l I!l



a Blooms: a Remember
II!l II!l



Difficulty: a 01 a Easy II!l II!l



a Gradeable: a automatic
II!l II!l



a Learning a Objective: a 01-01
II!l I!l I!l



Topic: a Modeling a Opportunity a Cost a Using a the a Production a Possibilities a Frontier
II!l II!l II!l II!l II!l II!l II!l II!l




4. The a underlying a reason a production a possibilities a frontiers a are a likely a to a be
II!l II!l II!l II!l II!l II!l II!l II!l II!l



a bowed a out a (rather a than a linear) a is a because
II!l II!l II!l II!l II!l II!l II!l



a. choices a have a consequences. II!l II!l



b. there a are a always a opportunity a costs. II!l II!l II!l II!l



c. some a resources a and a people a can a be a better a used a producing a one
II!l II!l II!l II!l II!l II!l II!l II!l II!l



a good a rather a than a another.
II!l II!l II!l II!l



d. there a is a always a some a level a of a unemployment. II!l II!l II!l II!l II!l II!l



Explanation: a If a the a production a possibilities a frontier a is a not a a a line a but a is
II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



a bowed a out a away a from a the a origin, a then a opportunity a cost a is a increasing. a The
II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



a reason a for a this a is a that a as a we a add a more a resources a to a the a production a of, a for
II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



a example, a pizza, a we a are a using a fewer a resources a to a produce a soda.
II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



a Compounding a that a problem, a at a each a stage a as a we a take a the a resources a away
II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



a from a soda a and a put a them a into a pizza, a we a are a moving a workers a who a are
II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



a worse a at a pizza a production a and a better a at a soda a production a than a those a moved
II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



a in a the a previous a stage. a This a means a that a the a increase a in a pizza a production a is
II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



a diminishing a and a the a loss a in a soda a production a is a increasing. a An a economist
II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



a would a call a this a an a example a of a increasing a opportunity a cost. a If a the a production
II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



a possibilities a frontier a is a a a straight a line a that a is a not a bowed a out a away a from a the
II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



a origin, a then a opportunity a cost a is a constant.
II!l II!l II!l II!l II!l II!l




AACSB: a Knowledge a Application II!l II!l



a Accessibility: a Keyboard a Navigation
II!l I!l I!l



a Blooms: a Remember
II!l II!l



Difficulty: a 01 a Easy II!l II!l



a Gradeable: a automatic
II!l II!l



a Learning a Objective: a 01-02
II!l I!l I!l



Topic: a Attributes a of a the a Production a Possibilities a Frontier
II!l II!l II!l II!l II!l II!l

, 5. Suppose a you a were a modeling a the a impact a of a the a introduction a of a computer
II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



a automation a into a manufacturing a on a a a production a possibilities a frontier a (PPF)
II!l II!l II!l II!l II!l II!l II!l II!l II!l



a with a two a manufactured a goods a on a their a respective a axes. a It a would a be a more
II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



a likely a that a the a result a would a be a
II!l II!l II!l . II!l II!l II!l II!l



a) generalized a growth a with a the a PPF a moving a both a up a and a to a the a right. II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



b) specialized a growth a with a the a PPF a moving a both a up a and a to a the a right. II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



c) generalized a growth a with a the a PPF a just a moving a up a and a not a to a the a right. II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



d) specialized a growth a with a the a PPF a just a moving a up a and a not a to a the II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



a right. a Explanation: a Computer a automation a is a a a general a improvement a in
II!l II!l II!l II!l II!l II!l II!l II!l II!l



a technology a so a it a would a improve a all a manufacturing. a As a a a result, a it a would
II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



a result a in a generalized a growth a and a move a the a PPF a both a up a and a to a the a right.
II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l




AACSB: a Knowledge a Application II!l II!l



a Accessibility: a Keyboard a Navigation
II!l I!l I!l



a Blooms: a Remember
II!l II!l



Difficulty: a 01 a Easy II!l II!l



a Gradeable: a automatic
II!l II!l



a Learning a Objective: a 01-03
II!l I!l I!l



a Topic: a Economic a Growth
II!l II!l II!l




6. The a optimization a assumption a suggests a that a people a make
II!l II!l II!l II!l II!l II!l



a. irrational a decisions. II!l



b. unpredictable a decisions. II!l



c. decisions a to a make a themselves a as a well a off a as a possible. II!l II!l II!l II!l II!l II!l II!l II!l



d. decisions a without a thinking a very a hard. II!l II!l II!l II!l



Explanation: a The a optimization a assumption a suggests a that a the a person a in a question
II!l II!l II!l II!l II!l II!l II!l II!l II!l



a is a trying a to a maximize a some a objective. a Consumers a are a assumed a to a be
II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



a making a decisions a that a maximize a their a happiness a subject a to a a a scarce a amount
II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l



a of a money.
II!l II!l




AACSB: a Reflective a Thinking II!l II!l



a Accessibility: a Keyboard a Navigation
II!l I!l I!l



a Blooms: a Remember
II!l II!l



Difficulty: a 01 a Easy II!l II!l



a Gradeable: a automatic
II!l II!l



a Learning a Objective: a 01-01
II!l I!l I!l



Topic: a Thinking a Economically
II!l II!l