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Economic Production and Resource Allocation

The document discusses production possibilities frontiers and the tradeoffs between goods. It provides examples of how the frontier can shift based on available labor and skills. It also differentiates between microeconomic and macroeconomic concepts.

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Braden Scott
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3 views3 pages

Economic Production and Resource Allocation

The document discusses production possibilities frontiers and the tradeoffs between goods. It provides examples of how the frontier can shift based on available labor and skills. It also differentiates between microeconomic and macroeconomic concepts.

Uploaded by

Braden Scott
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

O

O
ti
1.

fast services
EET
It

Étionfactors of t
Wagesrent Productions Income
Profit

a. Goods and Services Bought. Labor, Land, or Capitol given.


b. Wages
c. Goods and Services Bought. Labor, Land, or Capitol given.
d. Pro t

2.
Impossible
Doves

Butter
Feasible
Hawks

Guns
a. It is bowed out because as more guns are made the more of the workforce that know how to make butter is shifted to making guns and as
there are less people to make butter the more butter is sacri ced when making a lot of guns.

d. The hawks would get the bigger “peace dividend” because their increase in butter would be greater than the increase in the Doves’ butter.

3. The shape of the frontier is determined by the general skill set of the workforce. The position along the frontier is determined by the wishes
of the public.
4.
a. (1+1+2) x 10 = 40 mowed lawns 0 cars washed
(1+2+1) x 10 = 40 cars washed 0 mowed lawns
(1+1+2) x 5 + (1+2+1) x 5 = 20 mowed lawns and 20 cars washed.
5 + 20 = 25 cars washed 5 + 20 = 25 mowed lawns

A
400
Lawns D
Mowed

B
g
Cars Washed
c. The shape is bowed because some people are more ef cient at moving lawns and some are more ef cient at cars washed.
d. C is inef cient because it is not utilizing the best skills of each worker.

5.
a. Micro
b. Macro
c. Macro
d. Micro
e. Macro

6.
a. Positive
b. Positive
c. Normative
d. Normative
e. Positive

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