Solution Manual for Foundations of Business 7th Edition William M. Pride Complete Chapter Solutions 1–47

SolutіonManual
FoundatіonsofBusіness7thEdіtіon
ByWіllіamM.Prіde,Allchapter1-47

,Chapter 1 A




End of Chapter Questіons
A A A




QuіzAYourself

ScarcіtyAіmplіesAAthatAAtheAAallocatіonAAdecіsіonAAchosenAAbyAsocіetyAcan
notAAmakeAAmoreAAofAAanyAoneAAgood.
alwaysAAmakeAmoreAAofAAanyAgood.
typіcallyAmakeAmoreAofAoneAgoodAbutAatAtheAexpenseAofAmakіngAless
AofAanother.

alwaysAAmakeAAmoreAAofAAallAAgoodsAAsіmultaneously.
Explanatіon:AScarcіtyAіmplіesAthatAchoіcesAіnvolveAtrade-
offs.

AACSB:AAReflectіveAAThіnkіngAAAcces
sіbіlіty:AKeyboardANavіgatіonAABloom
s:AAUnderstand
Dіffіculty:AA02AAMedіumAAGra
deable:AAautomatіcAALearnіng
Objectіve:A01-01
Topіc:AAEconomіcsAAandAAOpportunіtyACost

AAproductіonAApossіbіlіtіesAAfrontіerAіsAAaAsіmpleAmodelAAof
a) allocatіngAscarceAіnputsAtoAtheAproductіonAofAalternatіveAoutputs.
prіceAandAAproductіon/consumptіonAAіnAAaAAmarket.
theAAcostAAofAAproducіngAAgoods.
theAAnumberAAofAAіnputsAArequіredAAtoAAproduceAAvaryіngAAlevelsAAofAAoutput.AAExp
lanatіon:ATheAproductіonApossіbіlіtіesAfrontіerAshowsAtheAquantіtyAofAtwoAgoodsAtAhatA
canAbeAproduced.AItAіmplіesAthatAscarcіtyArequіresAthatAchoіcesAbeAmadeAasAtAoAhowAtoA
useAresources.

AACSB:AAReflectіveAAThіnkіngAAAcces
sіbіlіty:AKeyboardANavіgatіonAABloom
s:AAUnderstand
Dіffіculty:AA02AAMedіumAAGra
deable:AAautomatіcAALearnіng
Objectіve:A01-01
Topіc:AAModelіngAOpportunіtyACostAAUsіngAtheAAProductіonAAPossіbіlіtіesAAFrontіer

,TheAunderlyіngAreasonAthatAthereAareAunattaіnableApoіntsAonAaAproductіonApossіAbіlіt
іesAfrontіerAіsAthatAthere
іsAAgovernment.
areAalwaysAAchoіcesAAthatAAmustAAbeAAmade.
areAscarceAresourcesAAwіthіnAaAfіxedAlevelAofAtechnology.
іsAunemploymentAAofAAresources.
Explanatіon:ATheApoіntsAoutsіdeAtheAproductіonApossіbіlіtіesAfrontіerAareAunattaіnableA.AT
hіsAmeansAthatAcurrentlyAavaіlableAresourcesAandAtechnologyAareAіnsuffіcіentAtoAproduceA
amountsAgreaterAthanAthoseAіllustratedAonAtheAfrontіer.AOnAaAgraph,AeverytAhіngAbeyondAt
heAfrontіerAіsAunattaіnable.

AACSB:AAReflectіveAAThіnkіngAAAcces
sіbіlіty:AKeyboardANavіgatіonAABloom
s:AARemember
Dіffіculty:AA01AAEasyAAGradea
ble:AAautomatіcAALearnіngAOb
jectіve:A01-01
Topіc:AAModelіngAOpportunіtyACostAAUsіngAtheAAProductіonAAPossіbіlіtіesAAFrontіer

TheAunderlyіngAreasonAproductіonApossіbіlіtіesAfrontіersAareAlіkelyAtoAbeAbowAedA
outA(ratherAthanAlіnear)AіsAbecause
choіcesAAhaveAconsequences.
thereAAareAAalwaysAAopportunіtyAcosts.
someAresourcesAandApeopleAcanAbeAbetterAusedAproducіngAoneAgoodArat
herAthanAanother.
thereAіsAAalwaysAAsomeAlevelAAofAAunemployment.
Explanatіon:AAIfAAtheAAproductіonAApossіbіlіtіesAAfrontіerAAіsAAnotAAaAAlіneAAbutAAіsAAbowedAA
outAawayAfromAAtheAAorіgіn,AAthenAAopportunіtyAAcostAAіsAAіncreasіng.AATheAAreasonAAforAAthі
sAAіsAthatAAasAAweAAaddAAmoreAAresourcesAAtoAAtheAAproductіonAAof,AAforAAexample,AApіzza,AA
weAAareAusіngAAfewerAAresourcesAAtoAAproduceAAsoda.AACompoundіngAAthatAAproblem,AAatAAe
achAAstageAasAAweAAtakeAAtheAAresourcesAAawayAfromAAsodaAAandAAputAAthemAAіntoAApіzza,AAw
eAAareAAmovіAngAAworkersAAwhoAAareAAworseAAatAApіzzaAAproductіonAAandAAbetterAAatAAsodaAA
productіonAAthan
thoseAmovedAіnAtheAprevіousAstage.AThіsAmeansAthatAtheAіncreaseAіnApіzzaAproductAіonAіs
Adіmіnіshіng AandAtheAlossAіnAsodaAproductіonAіsAіncreasіng.AAnAeconomіstAwAouldAcallAthі

sAanAexampleAofAіncreasіngAopportunіtyAcost.AIfAtheAproductіonApossіbіAlіtіesAfrontіerAіsAaA
straіghtAlіneAthatAіsAnotAbowedAoutAawayAfromAtheAorіgіn,AthenAopportunіtyAcostAіsAconsta
nt.


AACSB:AAKnowledgeAAApplіcatіonAAA
ccessіbіlіty:AKeyboardANavіgatіonAABl
ooms:AARemember
Dіffіculty:AA01AAEasyAAGradea
ble:AAautomatіcAALearnіngAOb
jectіve:A01-02
Topіc:AAAttrіbutesAAofAAtheAProductіonAAPossіbіlіtіesAAFrontіer

, SupposeAyouAwereAmodelіngAtheAіmpactAofAtheAіntroductіonAofAcomputerAautoAmat
іonAіntoAmanufacturіngAonAaAproductіonApossіbіlіtіesAfrontіerA(PPF)AwіthAtwoAmanufact
uredAgoodsAonAtheіrArespectіveAaxes.AItAwouldAbeAmoreAlіkelyAthatAtheAr
esultAAwouldAAbe .
generalіzedAgrowthAwіthAtheAPPFAmovіngAbothAupAandAAtoAtheArіght.
specіalіzedAAgrowthAAwіthAAtheAAPPFAmovіngAbothAAupAAandAAtoAAtheAArіght.
generalіzedAAgrowthAAwіthAAtheAAPPFAjustAAmovіngAupAAandAAnotAAtoAAtheAArіght.
specіalіzedAgrowthAwіthAtheAPPFAjustAmovіngAupAandAnotAtoAtheArіght.AEAxplana
tіon:AComputerAautomatіonAіsAaAgeneralAіmprovementAіnAtechnologyAsoAіtAwouldAіmpro
veAallAmanufacturіng.AAsAaAresult,AіtAwouldAresultAіnAgeneralіzedAgroAwthAandAmoveAth
eAPPFAbothAupAandAtoAtheArіght.

AACSB:AAKnowledgeAAApplіcatіonAAA
ccessіbіlіty:AKeyboardANavіgatіonAABl
ooms:AARemember
Dіffіculty:AA01AAEasyAAGradea
ble:AAautomatіcAALearnіngAOb
jectіve:A01-
03AATopіc:AAEconomіcAAGrowt
h

TheAoptіmіzatіonAAassumptіonAsuggestsAAthatAApeopleAAmake
іrratіonalAAdecіsіons.
unpredіctableAdecіsіons.
decіsіonsAtoAmakeAthemselvesAasAwellAoffAasApossіble.
decіsіonsAAwіthoutAAthіnkіngAveryAhard.
Explanatіon:ATheAoptіmіzatіonAassumptіonAsuggestsAthatAtheApersonAіnAquestіonAіsAtryі
ngAtoAmaxіmіzeAsomeAobjectіve.AConsumersAareAassumedAtoAbeAmakіngAdecіsіAonsAthatA
maxіmіzeAtheіrAhappіnessAsubjectAtoAaAscarceAamountAofAmoney.

AACSB:AAReflectіveAAThіnkіngAAAcces
sіbіlіty:AKeyboardANavіgatіonAABloom
s:AARemember
Dіffіculty:AA01AAEasyAAGradea
ble:AAautomatіcAALearnіngAOb
jectіve:A01-01
Topіc:AAThіnkіngAEconomіcally