SOLUTION MANUAL for Foundations Of Business 7th Edition By William M. Pride, All Chapter 1 - 47 Complete PDF

SOLUTION MANUAL

Foundations Of Business 7th Edition

By William M. Pride, All Chapter 1 - 47

,Chapter 1 g




End of Chapter Questions
g g g




QuizgYourself

1. Scarcitygimpliesgthatgthegallocationgdecisiongchosengbygsocietygcan
a) notgmakegmoregofganygoneggood.
b) alwaysgmakegmoregofganyggood.
c) typicallygmakegmoregofgoneggoodgbutgatgthegexpensegofgmakingglessgo
fganother.
d) alwaysgmakegmoregofgallggoodsgsimultaneously.gEx
planation:gScarcitygimpliesgthatgchoicesginvolvegtrade-offs.

AACSB:gReflectivegThinkinggAccessib
ility:gKeyboardgNavigationgBlooms:g
Understand
Difficulty:g02gMediumgGrad
eable:gautomaticgLearningg
Objective:g01-01
Topic:gEconomicsgandgOpportunitygCost

2. Agproductiongpossibilitiesgfrontiergisgagsimplegmodelgof
a) allocatinggscarceginputsgtogthegproductiongofgalternativegoutputs.
a) pricegandgproduction/consumptiongingagmarket.
b) thegcostgofgproducingggoods.
c) thegnumbergofginputsgrequiredgtogproducegvaryingglevelsgofgoutput.g Explan
ation:gThegproductiongpossibilitiesgfrontiergshowsgthegquantitygofgtwoggoodsgthatgc
angbegproduced.gItgimpliesgthatgscarcitygrequiresgthatgchoicesgbegmadegasgtoghowgtog
usegresources.

AACSB:gReflectivegThinkinggAccessib
ility:gKeyboardgNavigationgBlooms:g
Understand
Difficulty:g02gMediumgGrad
eable:gautomaticgLearningg
Objective:g01-01
Topic:gModelinggOpportunitygCostgUsinggthegProductiongPossibilitiesgFrontier

,3. Thegunderlyinggreasongthatgtheregaregunattainablegpointsgongagproductiongpossib
ilitiesgfrontiergisgthatgthere
a. isggovernment.
b. aregalwaysgchoicesgthatgmustgbegmade.
c. aregscarcegresourcesgwithingagfixedglevelgofgtechnology.
d. isgunemploymentgofgresources.
Explanation:gThegpointsgoutsidegthegproductiongpossibilitiesgfrontiergaregunattainable
.gThisgmeansgthatgcurrentlygavailablegresourcesgandgtechnologygareginsufficientgtogpro
ducegamountsggreatergthangthosegillustratedgongthegfrontier.gOngaggraph,geverythingg
beyondgthegfrontiergisgunattainable.

AACSB:gReflectivegThinkinggAccessib
ility:gKeyboardgNavigationgBlooms:g
Remember
Difficulty:g01gEasygGradeabl
e:gautomaticgLearninggObjec
tive:g01-01
Topic:gModelinggOpportunitygCostgUsinggthegProductiongPossibilitiesgFrontier

4. Thegunderlyinggreasongproductiongpossibilitiesgfrontiersgareglikelygtogbegbowe
dgoutg(rathergthanglinear)gisgbecause
a. choicesghavegconsequences.
b. theregaregalwaysgopportunitygcosts.
c. somegresourcesgandgpeoplegcangbegbettergusedgproducinggoneggoodgrather
gthanganother.

d. theregisgalwaysgsomeglevelgofgunemployment.
Explanation:gIfgthegproductiongpossibilitiesgfrontiergisgnotgaglinegbutgisgbowedgoutgawa
ygfromgthegorigin,gthengopportunitygcostgisgincreasing.gThegreasongforgthisgisgthatgasgwe
gaddgmoregresourcesgtogthegproductiongof,gforgexample,gpizza,gwegaregusinggfewergres

ourcesgtogproducegsoda.gCompoundinggthatgproblem,gatgeachgstagegasgwegtakegthegre
sourcesgawaygfromgsodagandgputgthemgintogpizza,gwegaregmovinggworkersgwhogaregw
orsegatgpizzagproductiongandgbettergatgsodagproductiongthangthosegmovedgingthegpre
viousgstage.gThisgmeansgthatgthegincreasegingpizzagproductiongisgdiminishinggandgtheglo
ssgingsodagproductiongisgincreasing.gAngeconomistgwouldgcallgthisgangexamplegofgincre
asinggopportunitygcost.gIfgthegproductiongpossibilitiesgfrontiergisgagstraightglinegthatgisg
notgbowedgoutgawaygfromgthegorigin,gthengopportunitygcostgisgconstant.

AACSB:gKnowledgegApplicationgAcc
essibility:gKeyboardgNavigationgBloo
ms:gRemember
Difficulty:g01gEasygGradeabl
e:gautomaticgLearninggObjec
tive:g01-02
Topic:gAttributesgofgthegProductiongPossibilitiesgFrontier

, 5. Supposegyougweregmodelinggthegimpactgofgthegintroductiongofgcomputergauto
mationgintogmanufacturinggongagproductiongpossibilitiesgfrontierg(PPF)gwithgtwogm
anufacturedggoodsgongtheirgrespectivegaxes.gItgwouldgbegmoreglikelygthatgthegresultg
wouldgbeg .
a) generalizedggrowthgwithgthegPPFgmovinggbothgupgandgtogthegright.
b) specializedggrowthgwithgthegPPFgmovinggbothgupgandgtogthegright.
c) generalizedggrowthgwithgthegPPFgjustgmovinggupgandgnotgtogthegright.
d) specializedggrowthgwithgthegPPFgjustgmovinggupgandgnotgtogthegright.gExpla
nation:gComputergautomationgisgaggeneralgimprovementgingtechnologygsogitgwould
gimprove gallgmanufacturing.gAsgagresult,gitgwouldgresult ginggeneralizedggrowthgandg

movegthegPPFgbothgupgandgtogthegright.

AACSB:gKnowledgegApplicationgAcc
essibility:gKeyboardgNavigationgBloo
ms:gRemember
Difficulty:g01gEasygGradeabl
e:gautomaticgLearninggObjec
tive:g01-
03gTopic:gEconomicgGrowt
h

6. Thegoptimizationgassumptiongsuggestsgthatgpeoplegmake
a. irrationalgdecisions.
b. unpredictablegdecisions.
c. decisionsgtogmakegthemselvesgasgwellgoffgasgpossible.
d. decisionsgwithoutgthinkinggveryghard.
Explanation:gThegoptimizationgassumptiongsuggestsgthatgthegpersongingquestiongisgtry
inggtogmaximizegsomegobjective.gConsumersgaregassumedgtogbegmakinggdecisionsgth
atgmaximizegtheirghappinessgsubjectgtogagscarcegamountgofgmoney.

AACSB:gReflectivegThinkinggAccessib
ility:gKeyboardgNavigationgBlooms:g
Remember
Difficulty:g01gEasygGradeabl
e:gautomaticgLearninggObjec
tive:g01-01
Topic:gThinkinggEconomically