Solution Manual for Issues in Economics Today 10th Edition by Robert Guell Chapter 1-47. A+

Solution Manual for Issues in Economics Today 10th Edition by Robert Guell Chapter 1-47. A+ Chapter 1 End of Chapter Questions Quiz 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 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, pizza, 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 pizza, we are moving workers who are worse at pizza production and better at soda production than those moved in the previous stage. This means that the increase in pizza 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 Topic: Attributes of the Production Possibilities Frontier