WU Production Possibilities Frontiers Questions

M1
12.
At the same time, Canada will be able to consume additional shirt(s) as a result of the trade
enter your response here
13. The production possibilities frontiers in the figure to the right show how many bananas and coconuts
you (Y) and your neighbor (N) can consume without trade. Suppose you are initially consuming
11 bananas and 2 coconuts and your neighbor is initially consuming 6 bananas and
8 coconuts.
Now, suppose you and your neighbor specialize by each only producing the good for which you have a
comparative advantage.
You give your neighbor half of your production for half of what he produces
If you trade with your neighbor, then you will have
enter your response here
additional coconut(s) after the trade
M2
2.
6.
9.
11. Question content area
Part 1
In fall 2006, Pace University in New York raised its annual tuition from
$24,400
to
$29,200.
Freshman enrollment declined from
1,425
in fall 2005 to
1,100
in fall 2006. Assuming that the demand curve for places in the freshmen class at Pace did not shift
between 2005 and 2006, use this information to calculate the
price elasticity of demand
Use the midpoint formula in your calculation.
Source: Karen W. Arenson, “At Universities, Plum Post at Top Is Now Shaky,” New York
Times, January 9, 2007.
The price elasticity of demand for Pace University for the fall of 2006 is ????
15.
Price elasticity of demand for
D1= enter your response here
(Enter your response rounded to two decimal places. Be sure to include the minus
sign.)
13.
MIT economist Jerry Hausman has estimated the price elasticity of demand for Post Raisin Bran cereal to
be
?2.5
and the price elasticity of demand for all types of breakfast cereals to be
?0.9.
Part 2
The demand for Post Raisin Bran cereal is ELASTIC OR INELASTIC
and the demand for all types of breakfast cereals is ELASTIC OR INELASTIC
M3
2. Suppose a pizza parlor has the following production costs:
$2.00
in labor per pizza,
$4.00
in ingredients per pizza,
$0.10
in electricity per pizza,
$3,500
in restaurant rent per month, and
$250 in insurance per month.
Assume the pizza parlor produces 3,000 pizzas per month.
What is the variable cost of production (per month)?
The variable cost of production is
$ enter your response here . (Enter your response as an integer.)
What is the fixed cost of production (per month)? Enter responses here
3. Consider a production process where flowers are grown (the output) using gardeners (labor) and
greenhouses (capital). The quantity of flowers grown per day with various combinations of labor and
capital are shown in the table below.
Part 2
Suppose that each gardener is paid
$240
per day and the greenhouse is rented for
$450
per day.
Part 3
Fill in total cost in the table below. (Enter your responses as integers.)
Part 4
Labor Capital Output
Total Cost
0
1
0
$ enter your response here
1
1
40
enter your response here
2
1
120
enter your response here
3
1
160
enter your response here
4
1
180
enter your response here
5
1
190
enter your response here
4.The table below shows the quantity of workers and total output for a local pizza restaurant. Answer the
following questions based on this table:
Quantity of Workers Total Output
0
1
0
4
2
³
4
5
6
18
23
27
25
When the owner hires 4 workers, the average product labor is
enter your response here (Enter your response rounded to two decimal places.)
6. Consider a production process where flowers are grown (the output) using gardeners (labor) and
greenhouses (capital). The quantity of flowers grown per day with various combinations of labor and
capital are shown in the table below.
Part 2
Suppose that each gardener is paid
$240
per day and the greenhouse is rented for
$450
per day.
Part 3
Fill in total cost in the table below. (Enter your responses as integers.)
Part 4
Labor Capital Output
Total Cost
0
1
0
$ enter your response here
1
1
40
enter your response here
2
1
120
enter your response here
3
1
160
enter your response here
4
1
180
enter your response here
5
1
190
enter your response here
5. Suppose
Rob
is currently producing
1,000
hotdogs
per month at a total cost of
$ 200.00.
What is
his
average total cost of production?
$. 2
Now suppose Rob increases production to 1,001 hotdogs, and the total cost of production increases to
$ 200.08. What is his marginal cost of producing the 1,001thhotdog?
10.
Quantity Total Total Profit Marginal Marginal
(Bushels) Revenue Cost (TR?TC) Revenue Cost
(Q)
(TR)
(TC)
(MR)
(MC)
0
1
2
3
4
5
6
7
8
9
10
$0.00
4.00
8.00
12.00
16.00
20.00
24.00
28.00
32.00
36.00
40.00
$1.00 -$1.00
4.00
0.00
6.00
2.00
7.50
4.50
9.50
6.50
12.00 8.00
15.00 9.00
19.50 8.50
25.50 6.50
32.50 3.50
40.50 ?0.50
-$4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
-$3.00
2.00
1.50
2.00
2.50
3.00
4.50
6.00
7.00
8.00
Part 2
Suppose the price of wheat rises to
$7.00 per bushel. Farmer Parker will maximize profits by producing
enter your response here bushels of wheat (enter a whole number).
11. Frances sells pencils in the perfectly competitive pencil market. Her output per day and costs are
seen in the table.
Output per day Total Cost MC Total Revenue Marginal Revenue
0
$1.30
$0.00
—
1
2
3
4
5
6
7
8
2.35
3.30
4.20
4.90
5.80
7.30
9.75
12.35
$1.05
0.95
0.90
0.70
0.90
1.50
2.45
2.60
1.70
3.40
5.10
(ii)
8.50
10.20
(iv)
13.60
Part 2
a. If the current equilibrium price in the pencil market is
$1.70, what price will Frances charge?
$1.70
1.70
(i)
1.70
1.70
(iii)
1.70
1.70
5.
12.
15. Bob is a general contractor in the construction industry. Suppose the construction industry is perfectly
competitive. In the short run, assume the marginal cost of building new homes equals the market price of
a new home when Bob builds 10 new homes. At this level of output, Bob’s average fixed cost of building a
new home is
$160,000
and his average variable cost is
$140,000
per home (so his average total cost is
$300,000
per home). If new homes are selling for
$110,000,
should he continue to produce 10 new homes in the short run or shut down?
Part 2
In the short run, Bob should _______ produce or shutdown ?
and lose
$ enter your response here .
(Enter your response as a whole number.)
9.
16.
17.
18. Jason Furman and Tim Simcoe, who served on President Barack Obama’s Council of Economic
Advisors, wrote, “Economists have studied [price discrimination] for many years, and while big data
seems poised to revolutionize pricing practice, it has not altered the underlying principles…Those
principles suggest that [price discrimination] is often good for both firms and their customers.” Furman
and Simcoe describe “need-based financial aid for college students” as an example of price
discrimination that is good for consumers.
Source: Jason Furman and Tim Simcoe, “The Economics of Big Data and Differential Pricing,”
www.whitehouse.gov/blog/2015/02/06/economics-big-data-and-differential-pricing,
February 6, 2015.
What do Furman and Simcoe mean by “underlying principles”?
A. When prices reflect the benefit a buyer receives from a good, sellers can serve customers who
would otherwise get priced out of the market.
B. When prices reflect the quality of a seller’s good, sellers can serve customers who would
otherwise get priced out of the market.
C. When prices reflect a seller’s costs, sellers can serve customers who would otherwise get priced
out of the market.
D. When prices reflect a buyer’s ability to pay, sellers can serve customers who would otherwise get
priced out of the market.
19. In June 2018, a federal court judge ruled against the U.S. Department of Justice, which was
attempting to block a merger between AT&T and Time Warner. In addition to its wireless business, AT&T
owned the DirectTV satellite television service. Time Warner owned HBO, TBS, TNT, and the Warner
Brothers film studio. An article in the Wall Street Journal on the judge’s ruling noted, “The case marked
the first time in 40 years that a court had seen a fully litigated challenge to a so-called vertical merger . . .
Such cases are considered more difficult for the government to win than the typical ‘horizontal’ merger
case.”
Source: Brent Kendall and Drew FitzGerald, “AT&T Beats U.S. in Antitrust Fight over Time Warner,”
Wall Street
Journal,
June 12, 2018.
What is a vertical merger case?
A. A vertical merger is a merger between firms at different stages in the production of a good.
B. A vertical merger is a merger between firms that yields significant consumer benefits.
C. A vertical merger is a merger between firms in the same industry.
20.

Purchase answer to see full
attachment