Question

8. Outward shifts of the U.S. production possibilities frontier can be caused by

Group of answer choices

human actions such as wars and environmental pollution.

advances in technology and increases in human capital (education).

natural disasters such as earthquakes, hurricane, floods and epidemics.

the discovery and development of new sources of raw materials in Brazil, Canada, or Russia.

increasing the current production of consumption goods and decreasing the current production of capital goods.

1. In Question 8, mutual gain would result if ____ trades away ____ in return for ____.

Group of answer choices

the U.S., one car, 15 computers.

the U.S., five computers, one car.

the U.S., 15 computers, one car.

Canada, one car, 15 computers.

Canada, one computer, 15 cars.

9. Given 100 hours of labor, if the U.S. can produce either 1000 computers or 100 cars and Canada can produce either 800 computers or 40 cars, then

Group of answer choices

the U.S. has a comparative advantage (CA) in both computers and cars.

the U.S. has a CA in computers and should specialize in the production of computers.

the U.S. has a CA in cars and should specialize in the production of cars.

Canada has a CA in cars and should specialize in the production of cars.

Canada has a CA in computers and should specialize in the production of cars.

2. If (i) the price of pepperoni (a pizza topping or input) increases, (ii) pizza is a normal good in consumption, and, (iii) consumer income increases, then the equilibrium quantity of pizza

Group of answer choices

will decrease but the change in the equilibrium price of pizza is indeterminate.

will increase but the change in the equilibrium price of pizza is indeterminate.

may increase, decrease, or not change but equilibrium price of pizza will not change.

may increase, decrease, or not change but the equilibrium price of pizza will increase.

may increase, decrease, or not change but the equilibrium price of pizza will decrease.

32. If the demand for a good is inelastic, then (own) price elasticity coefficient E_d

Group of answer choices

equals 0 and so a 50% increase in price will not change the quantity demanded, Q^d.

is greater than 1 and so a 10% increase in price will decrease Q^d by more than 10%.

is less than 1 and so a 5% decrease in price will increase Q^d by less than 5%.

is less than 1 and so a 15% decrease in price will increase Q^d by more than 15%.

the demand curve is vertical.

42. If Bo Bob’s Burgers sells 200 deluxe burgers at $6 and 800 deluxe burgers at $4, then (using the midpoint formula) the (own) price elasticity of deluxe burger demand, Ed, is

Group of answer choices

0.33.

1.5.

2.67.

3.0.

10.0.

Answer 1

** i think you do not give the exact numbering so i am doing it as per my knowledge, please recheck the numbering of questions**

8. Ans - advances in technology and increases in human capital (education).

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1. Ans - the U.S., one car, 15 computers

Explanation:

As we can see in question 9 that the opportunity cost of computer should be between 10 to 20 computers for one car and US has comparative advantage in Car so US should trade away ( export) one car for 15 computers for mutual gain.

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2. Ans - the U.S. has a CA in cars and should specialize in the production of cars.

Explanation:

if the U.S. can produce either 1000 computers or 100 cars, it means

For US the opportunity cost of producing 1 computer = 100/1000 = 0.1 car

For US the opportunity cost of producing 1 car = 1000/100 = 10 computer

For Canada the opportunity cost of producing 1 computer = 40/800 = 0.2 car

For Canada the opportunity cost of producing 1 car = 800/40 = 20 computer

As opportunity cost of producing car is low for US so US has comparative advantage in Car and Canada has comparative advantage in computer.

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2. Ans - may increase, decrease, or not change but the equilibrium price of pizza will increase.

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32. Ans - is less than 1 and so a 5% decrease in price will increase Q^d by less than 5%.

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42. Ans - 3.0

Explanation:

Elasticity = [(800-200)/ {(800+200)/2}] / [(4-6)/{(4+6)/2}] = -3

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