Chapter 3 Homework Answer Keys

Chapter 3 Homework Answer Keys - Chapter 3 Homework Answer...

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Chapter 3 Homework Answer Keys 2. a. Workers needed to make: One Car One Ton of Grain U.S. 1/4 1/10 Japan 1/4 1/5 b. See Figure 1. With 100 million workers and four cars per worker, if either economy were devoted completely to cars, it could make 400 million cars. Because a U.S. worker can produce 10 tons of grain, if the United States produced only grain it would produce 1,000 million tons. Because a Japanese worker can produce 5 tons of grain, if Japan produced only grain it would produce 500 million tons. These are the intercepts of the production possibilities frontiers shown in the figure. Note that because the trade-off between cars and grain is constant for both countries, the production possibilities frontiers are straight lines. Figure 1 c. Because a U.S. worker produces either four cars or ten tons of grain, the opportunity cost of one car is two and one-half tons of grain, which is ten divided by four. Because a Japanese worker produces either four cars or five tons of grain, the opportunity cost of one car is one and one-fourth tons of grain, which
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This note was uploaded on 04/26/2011 for the course ECON 201 taught by Professor Joyce during the Spring '07 term at Drexel.

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Chapter 3 Homework Answer Keys - Chapter 3 Homework Answer...

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