Foundations of Business – 7th Edition (William M. Pride) | Complete Solution Manual for Chapters 1–47

Solution Manual oi




Foundations of Business 7th Edition
oi oi oi oi oi




by William M. Pride, All chapter 1 - 47
oi oi oi oi oi oi oi oi oi

,Chapter 1 oi


EndoiofoiChapteroiQuestions
QuizoiYourself

1. Scarcityoiimpliesoithatoitheoiallocationoidecisionoichosenoibyoisocietyoican
a) notoimakeoimoreoiofoianyoioneoigood.
b) alwaysoimakeoimoreoiofoianyoigood.
c) typicallyoimakeoimoreoiofoioneoigoodoibutoiatoitheoiexpenseoiofoimaking
oilessoiofoianother.
d) alwaysoimakeoimoreoiofoialloigoodsoisimultaneously.oi
Explanation:oiScarcityoiimpliesoithatoichoicesoiinvolveoitrade-

offs.

AACSB:oiReflectiveoiThinkingoiAcces
sibility:oiKeyboardoiNavigationoiBloom
s:oiUnderstand
Difficulty:oi02oiMediumoiGra
deable:oiautomaticoiLearningoi
Objective:oi01-01
Topic:oiEconomicsoiandoiOpportunityoiCost

2. Aoiproductionoipossibilitiesoifrontieroiisoiaoisimpleoimodeloiof
a) allocatingoiscarceoiinputsoitooitheoiproductionoiofoialternativeoioutputs.
a) priceoiandoiproduction/consumptionoiinoiaoimarket.
b) theoicostoiofoiproducingoigoods.
c) theoinumberoiofoiinputsoirequiredoitooiproduceoivaryingoilevelsoiofoioutput.o i Exp
lanation:oiTheoiproductionoipossibilitiesoifrontieroishowsoitheoiquantityoiofoitwooigoodsoit
hatoicanoibeoiproduced.oiItoiimpliesoithatoiscarcityoirequiresoithatoichoicesoibeoimadeoiasoit
ooihowoitooiuseoiresources.

AACSB:oiReflectiveoiThinkingoiAcces
sibility:oiKeyboardoiNavigationoiBloom
s:oiUnderstand
Difficulty:oi02oiMediumoiGra
deable:oiautomaticoiLearningoi
Objective:oi01-01
Topic:oiModelingoiOpportunityoiCostoiUsingoitheoiProductionoiPossibilitiesoiFrontier
3. Theoiunderlyingoireasonoithatoithereoiareoiunattainableoipointsoionoiaoiproductionoipossi
bilitiesoifrontieroiisoithatoithere
a) isoigovernment.
b) areoialwaysoichoicesoithatoimustoibeoimade.

, c) areoiscarceoiresourcesoiwithinoiaoifixedoileveloiofoitechnology.
d) isoiunemploymentoiofoiresources.
Explanation:oiTheoipointsoioutsideoitheoiproductionoipossibilitiesoifrontieroiareoiunattainable
.oiThisoimeansoithatoicurrentlyoiavailableoiresourcesoiandoitechnologyoiareoiinsufficientoitooi
produceoiamountsoigreateroithanoithoseoiillustratedoionoitheoifrontier.oiOnoiaoigraph,oieveryt
hingoibeyondoitheoifrontieroiisoiunattainable.

AACSB:oiReflectiveoiThinkingoiAcces
sibility:oiKeyboardoiNavigationoiBloom
s:oiRemember
Difficulty:oi01oiEasyoiGradea
ble:oiautomaticoiLearningoiOb
jective:oi01-01
Topic:oiModelingoiOpportunityoiCostoiUsingoitheoiProductionoiPossibilitiesoiFrontier

4. Theoiunderlyingoireasonoiproductionoipossibilitiesoifrontiersoiareoilikelyoitooibeoibow
edoioutoi(ratheroithanoilinear)oiisoibecause
a. choicesoihaveoiconsequences.
b. thereoiareoialwaysoiopportunityoicosts.
c. someoiresourcesoiandoipeopleoicanoibeoibetteroiusedoiproducingoioneoigoodoi
ratheroithanoianother.
d. thereoiisoialwaysoisomeoileveloiofoiunemployment.
Explanation:oiIfoitheoiproductionoipossibilitiesoifrontieroiisoinotoiaoilineoibutoiisoibowedoiout
oiawayoifromoitheoiorigin,oithenoiopportunityoicostoiisoiincreasing.oiTheoireasonoiforoithisoiis
oithatoiasoiweoiaddoimoreoiresourcesoitooitheoiproductionoiof,oiforoiexample,oipizza,oiweoiareo
iusingoifeweroiresourcesoitooiproduceoisoda.oiCompoundingoithatoiproblem,oiatoieachoistageo
iasoiweoitakeoitheoiresourcesoiawayoifromoisodaoiandoiputoithemoiintooipizza,oiweoiareoimovi
ngoiworkersoiwhooiareoiworseoiatoipizzaoiproductionoiandoibetteroiatoisodaoiproductionoithan
oithoseoimovedoiinoitheoipreviousoistage.oiThisoimeansoithatoitheoiincreaseoiinoipizzaoiproduct
ionoiisoidiminishingoiandoitheoilossoiinoisodaoiproductionoiisoiincreasing.oiAnoieconomistoiw
ouldoicalloithisoianoiexampleoiofoiincreasingoiopportunityoicost.oiIfoitheoiproductionoipossibi
litiesoifrontieroiisoiaoistraightoilineoithatoiisoinotoibowedoioutoiawayoifromoitheoiorigin,oithenoi
opportunityoicostoiisoiconstant.

AACSB:oiKnowledgeoiApplicationoiA
ccessibility:oiKeyboardoiNavigationoiBl
ooms:oiRemember
Difficulty:oi01oiEasyoiGradea
ble:oiautomaticoiLearningoiOb
jective:oi01-02
Topic:oiAttributesoiofoitheoiProductionoiPossibilitiesoiFrontier
5. Supposeoiyouoiwereoimodelingoitheoiimpactoiofoitheoiintroductionoiofoicomputeroiauto
mationoiintooimanufacturingoionoiaoiproductionoipossibilitiesoifrontieroi(PPF)oiwithoitwooi
manufacturedoigoodsoionoitheiroirespectiveoiaxes.oiItoiwouldoibeoimoreoilikelyoithatoitheoir
esultoiwouldoibeoi .
a) generalizedoigrowthoiwithoitheoiPPFoimovingoibothoiupoiandoitooitheoiright.

, b) specializedoigrowthoiwithoitheoiPPFoimovingoibothoiupoiandoitooitheoiright.
c) generalizedoigrowthoiwithoitheoiPPFoijustoimovingoiupoiandoinotoitooitheoiright.
d) specializedoigrowthoiwithoitheoiPPFoijustoimovingoiupoiandoinotoitooitheoiright.oiE
xplanation:oiComputeroiautomationoiisoiaoigeneraloiimprovementoiinoitechnologyoisooiitoi
wouldoiimproveoialloimanufacturing.oiAsoiaoiresult,oiitoiwouldoiresultoiinoigeneralizedoigro
wthoiandoimoveoitheoiPPFoibothoiupoiandoitooitheoiright.

AACSB:oiKnowledgeoiApplicationoiA
ccessibility:oiKeyboardoiNavigationoiBl
ooms:oiRemember
Difficulty:oi01oiEasyoiGradea
ble:oiautomaticoiLearningoiOb
jective:oi01-
03oiTopic:oiEconomicoiGrowt
h

6. Theoioptimizationoiassumptionoisuggestsoithatoipeopleoimake
a. irrationaloidecisions.
b. unpredictableoidecisions.
c. decisionsoitooimakeoithemselvesoiasoiwelloioffoiasoipossible.
d. decisionsoiwithoutoithinkingoiveryoihard.
Explanation:oiTheoioptimizationoiassumptionoisuggestsoithatoitheoipersonoiinoiquestionoiisoi
tryingoitooimaximizeoisomeoiobjective.oiConsumersoiareoiassumedoitooibeoimakingoidecisi
onsoithatoimaximizeoitheiroihappinessoisubjectoitooiaoiscarceoiamountoiofoimoney.

AACSB:oiReflectiveoiThinkingoiAcces
sibility:oiKeyboardoiNavigationoiBloom
s:oiRemember
Difficulty:oi01oiEasyoiGradea
ble:oiautomaticoiLearningoiOb jective:oi01-
01
Topic:oiThinkingoiEconomically
7. Imagineoianoieconomistoiorderingoidonutsoione-
byone.oiWhenoidecidingoihowoimanyoidonutsoitooiorderoitheyoiwouldoipickoithatoinumberoiw
he reoitheoienjoymentoiofoitheoi
equalsoitheoienjoymentoitheyoicouldoigetoifromoiusingoitheoimoneyoionoianotheroigood. a.
firstoidonut
b. last/marginaloidonut
c. average/typicaloidonut
d. totaloinumberoiofoidonuts
Explanation:oiTheoienjoymentoiofoitheoilastoisliceoiisoitheoimarginaloibenefitoiofoithatoislice.oiIf
oi
thisoienjoymentoiisoimoreoithanoitheoienjoymentoifromoisomeoialternative,oimoreoiwilloibeoicon
sumed.