quanda03 - Chapter 3 1. Angela is a college student. She...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Practice Questions to accompany Mankiw & Taylor: Economics 1 Chapter 3 1. Angela is a college student. She takes a full load of classes and has only 5 hours per week for her hobby. Angela is artistic and can make 2 clay pots per hour or 4 coffee mugs per hour. a. Draw Angela's production possibilities frontier for pots and mugs. Exhibit 2 Answer: See Exhibit 5 Exhibit 5 b. What is Angela's opportunity cost of 1 pot? 10 pots? Answer: 2 mugs. 20 mugs. c. What is Angela's opportunity cost of 1 mug? 10 mugs? Answer: 1/2 pot. 5 pots
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Practice Questions to accompany Mankiw & Taylor: Economics 2 d. Why is her production possibilities frontier a straight line instead of bowed out like those presented in Chapter 2? Answer: Because Angela’s productivity in pot and mug production is constant – it doesn’t depend on how many mugs or pots she is making. Therefore the opportunity cost of mugs in terms of pots is constant (and, of course, so is the opportunity cost of pots in terms of mugs). 2. Suppose a worker in Germany can produce 15 computers or 5 tonnes of grain per month. Suppose a worker in Poland can produce 4 computers or 4 tonnes of grain per month. For simplicity, assume that each country has only one worker. a. Fill out the following table: Answer: b. Graph the production possibilities frontier for each country in Exhibit 3. Exhibit 3 Answer: See Exhibit 6.
Background image of page 2
Practice Questions to accompany Mankiw & Taylor: Economics 3 Exhibit 6 c. What is the opportunity cost of a computer in Germany? What is the opportunity cost of a tonne of grain in Germany? Answer:
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 6

quanda03 - Chapter 3 1. Angela is a college student. She...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online