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TheEconomicProblemCHAPTER3CHECKPOINTSProblem1Problem2Problem3Problem1Problem2Problem1Problem2ClickerversionClickerversionProblem4Problem5Problem1ClickerversionClicker

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versionCheckpoint3.1Checkpoint3.2Checkpoint3.4Checkpoint3.3PracticeProblem1Thefigureshowsaneconomy’sproductionpossibilities.Whichpointsareattainable?CHECKPOINT3.1SolutionThePPFistheboundarybetweencombinationsofgoodsthatareattainableandunattainable. AnypointonthePPForbelow(inside)thePPFisattainable.AnypointoutsidethePPFisunattainable.PointA,B,C,DandEareattainable.PointFandGareunattainable. CHECKPOINT3.1StudyPlanProblemWecanproduceallcombinations______.A.onthePPFbutnotinsideor outsidethePPFB.insidethePPFbutnotonthe PPForoutsidethePPFC.onthePPFandoutsidethePPFD.insidethePPFandonthePPFCHECKPOINT3.1PracticeProblem2Thefigureshowsaneconomy’sproductionpossibilities.Whichpointsareefficient?CHECKPOINT3.1SolutionTobeefficient,apointmustbeattainable.SopointsFandGarenotefficient.PointsinsidethePPFarenotefficientbecausemoregoodscanbeproducedatsuchpoints.SopointsDandEarenotefficient.TheonlyefficientpointsarethoseonthePPF—pointsA,B,andC.CHECKPOINT3.1StudyPlanProblemProductionefficiencyoccurswhenA.itisnotpossibletoproducemore

ofonegoodorservicewithout producinglessofsomethingelse.B.weusetheleastpossible quantityofresources.C.weproduceonlyonegood.D.weproduceatleastpossiblecost.CHECKPOINT3.1Figure1PracticeProblem3Thefigureshowsaneconomy’sproductionpossibilities.Whichpointsareinefficient?CHECKPOINT3.1Figure1SolutionInefficiencyoccurswhenresourcesaremisallocatedorunemployed.InefficiencyoccursatanypointinsidethePPF.CombinationsatpointsDandEareinefficient.CHECKPOINT3.1StudyPlanProblemWhichpointsareinefficient?A.PointsFandGonlyB.PointsDandEonlyC.PointsA,B,C,D,andED.PointsA,B,andConlyCHECKPOINT3.1Figure1PracticeProblem4Thefigureshowsaneconomy’sproductionpossibilities.Whichpointsillustrateatradeoff?CHECKPOINT3.1SolutionBeginbyrecallingthatatradeoffisanexchange—givingupsomethingtogetsomethingelse.AtradeoffoccurswhenmovingalongthePPFfromonepointtoanother.SomovingfromanypointonthePPF,pointA,B,orC,toanotherpointonthePPFillustratesatradeoff.CHECKPOINT3.1StudyPlanProblemAtradeoffoccurswhenwe____.A.movefromapointinsidethePPFtoapointonthePPFB.movefromapointoutsidethePPFtoapointonthePPFC.movefromapointonthePPFtoanotherpointonthePPFD.movefromapointonthePPFto

apointoutsidethePPFCHECKPOINT3.1Figure1PracticeProblem5Thefigureshowsaneconomy’sproductionpossibilities.Whichpointsillustrateafreelunch?CHECKPOINT3.1SolutionBeginbyrecallingthatafreelunchisgettingsomethingwithoutgivingupsomethingelse.Freelunchesoccuratallpointsbelow(orinside)thePPF.ThesepointsareDandE.CHECKPOINT3.1StudyPlanProblemAfreelunchoccursat____.A.PointsA,B,C,andD

B.PointsFandGonlyC.PointsDandEonlyD.PointsA,B,andC

CHECKPOINT3.1Figure1PracticeProblem1ThetableshowsRobinsonCrusoe’sproductionpossibilities.IfCrusoeincreasesproductionofberriesfrom21poundsto26poundsandhisproductionisefficient,whatishisopportunitycostofapoundofberries?DoesCrusoe’sopportunitycostofberriesincreaseasheproducesmoreberries?CHECKPOINT3.2SolutionProductionisefficient,soCrusoeproducesonhisPPF.TheopportunitycostofanextrapoundofberriesisthedecreaseinthequantityoffishdividedbytheincreaseinthequantityofberriesashemovesalonghisPPFinthedirectionof

producingmoreberries.CHECKPOINT3.2Table1tellsyouthattoincreasethequantityofberriesfrom21poundsto26pounds,CrusoemovesfromrowFtorowE.Hisproductionoffishdecreasesfrom15poundsto13pounds.Togain5poundsofberries,Crusoemustforego2poundsoffish.CHECKPOINT3.2Theopportunitycostof1poundofberriesisthe2poundsoffishforgonedividedby5poundsofberriesgained.Hisopportunitycostis2/5ofapoundoffish.CHECKPOINT3.2TheopportunitycostofberriesincreasesasCrusoeproducesmoreberries.Toseewhy,moveCrusoefromrowEtorowDinTable1.Theproductionofberriesincreasesby4poundsto30poundsandproductionoffishdecreasesby2.5poundsto10.5pounds.CHECKPOINT3.2Toincreasehisproductionofberriesby4poundsheforgoes2.5poundsoffish.Hisopportunitycostof1poundofberriesis5/8ofapoundoffish.AsCrusoeproducesmoreberries,hisopportunitycostofapoundofberriesincreases.CHECKPOINT3.2PracticeProblem2ThetableshowsRobinsonCrusoe’sproductionpossibilities.IfCrusoeisproducing10poundsoffishand21poundsofberries,whatishisopportunitycostofanextrapoundofberries?Whatishisopportunitycostofanextrapoundoffish?CHECKPOINT3.2SolutionThefiguregraphsthedatainthetableandshowsCrusoe’sPPF.IfCrusoeis

producing10poundsoffishand21poundsofberries,heisproducingatpointZ.YoucanseethatZisapointinsideCrusoe'sPPF.CHECKPOINT3.2WhenCrusoe

produces21poundsofberries,hehassufficienttimeavailabletoproduce15poundsoffishatpointFonhisPPF.Toproducemoreberries,Crusoe

canmovefrompointZtowardpointDonhisPPFandforgonofish.Hisopportunity

costofapoundofberriesiszero.CHECKPOINT3.2PracticeProblem1Thetableshowsaneconomythatproduceseducationservicesandconsumptiongoods.Iftheeconomycurrentlyproduces500graduatesayearand2,000unitsofconsumptiongoods,whatistheopportunitycostofeconomicgrowth?CHECKPOINT3.3SolutionIftheeconomyproduces3,000unitsofconsumptiongoodsandnograduates,nogrowthoccurs.Byincreasingthenumberofgraduatesto500,resourcesexpandandgrowthoccurs.Theopportunitycostofgrowthis1,000units(3,000minus2,000)ofconsumptiongoods.CHECKPOINT3.3Byincreasingthenumberofgraduatesfrom0to500,resourcesexpandandeconomicgrowthoccurs.Theopportunitycostofeconomicgrowthis1,000units(3,000minus2,000)ofconsumptiongoods.CHECKPOINT3.3PracticeProblem1TablesshowTony’sandPatty’sproductionpossibilities.CHECKPOINT3.4Whohasacomparativeadvantageinproducingsnowboards?Whohasacomparativeadvantageinproducingskis?CHECKPOINT3.4SolutionThepersonwithacomparativeadvantageinproducingsnowboardsisthepersonwhohastheloweropportunitycostofproducingasnowboard.Toproduce5moresnowboards,Tonymustproduce10fewerskis,sohisopportunitycostof1snowboardis2skis.Toproduce10moresnowboards,Pattymustproduce5fewerskis.Heropportunitycostof1snowboardis?aski.Pattyhastheloweropportunitycostofproducingasnowboard,soshehasacomparativeadvantageinproducingsnowboards.CHECKPOINT3.4Tony’sproductionpossibilitiesshowthattoproduce10moreskishemustproduce5fewersnowboards.Sohisopportunitycostofproducingaskiis1/2snowboard.Patty’sproductionpossibilitiesshowthattoproduce5moreskis,shemustproduce10fewersnowboards,soheropportunitycostofproducingaskiis2snowboards.Ton

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