A nation's production possibilities curve is "bowed out" from the origin because
a. resources are not equally efficient in producing every good
c. resources are scarce
d. wants are virtually unlimited
. John has a paper route and spends all his weekly allowance on hamburgers and pop. The price of a hamburger is $2 and the price of a pop is $1. every week John buys 20 hamburgers and 10 pop. If the price of a hamburger rises to $4 (because of a ban on beef imports) and the price of a pop falls to 50 cents. Draw indifference curves to answer the following:
a)
How many hamburgers and pops will John buy now?
John will now buy 10 hamburgers and 20 pops.
The correct answer to the first question is a. Resources are not equally efficient in producing every good.
The production possibilities curve (PPC) represents the maximum combination of goods and services that a nation can produce with its available resources and technology. The curve is "bowed out" or concave from the origin because resources are not equally efficient in producing every good. This means that as the nation reallocates resources from one good to another, the opportunity cost increases. In other words, as the production of one good increases, the production of the other good must decrease at an increasing rate.
Now, let's move on to the second question about John's paper route and his consumption choices. To answer this question, we need to understand the concept of indifference curves.
Indifference curves represent combinations of goods or services that provide the same level of satisfaction or utility to an individual. In other words, they show all the possible combinations of hamburgers and pops that would make John equally satisfied.
To draw indifference curves, we need to consider John's preferences. Since the question does not provide any information about his preferences, we cannot draw specific indifference curves. However, I can explain the general process of drawing indifference curves.
1. Start by plotting different combinations of hamburgers and pops on a graph.
For example, you can choose different quantities of hamburgers and pops, such as (0 hamburgers, 10 pops), (5 hamburgers, 5 pops), (10 hamburgers, 0 pops), and so on.
2. For each combination, determine John's level of satisfaction or utility.
Again, since we don't have specific information about John's preferences, we cannot assign utility values. Instead, we can assume that higher quantities of both hamburgers and pops provide higher utility.
3. Connect the points of equal satisfaction to form the indifference curves.
Draw curves that pass through the points representing equal levels of satisfaction or utility.
The shape of indifference curves can vary based on individual preferences. Generally, they are downward-sloping convex curves, representing the diminishing marginal rate of substitution. This means that as John consumes more hamburgers, he would be willing to give up fewer pops to maintain the same level of satisfaction.
To answer the remaining parts of the question, please provide the options or specific inquiries related to the indifference curves you would like to know about.
The nation's production possibilities curve is "bowed out" from the origin because:
a. Resources are not equally efficient in producing every good.
The production possibilities curve represents the various combinations of two goods that a nation can produce given its resources and technology. The curve is typically bowed out because resources are not equally efficient in producing every good. This means that as more of one good is produced, resources that are better suited for producing the other good are diverted, resulting in increasing opportunity costs.
Regarding John's paper route and his weekly spending on hamburgers and pops, we can analyze the changes in his consumption patterns due to changes in prices. If the price of a hamburger rises to $4 and the price of a pop falls to 50 cents, we can draw indifference curves to answer the following:
a) The indifference curve represents the different combinations of hamburgers and pops that provide the same level of satisfaction to John. By drawing indifference curves, we can determine John's preferences and consumption choices.
To draw the indifference curves, we need more information about John's preferences or utility function. Without this information, we cannot accurately represent the specific combinations that provide the same level of satisfaction for John.