Solution Manual for Foundations of Business 7th Edition by William M. PrideSolution Manual for Foundations of Business 7th Edition by William M. PrideSolution Manual for Foundations of Business 7th Edition by William M. PrideSolution Manual for Foundations of Business 7th Edition by William M. Prid...
Foundations of Business 7th Edition
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by William M. Pride, All chapter 1 - 47
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,Chapter 1 aII!l
End of Chapter Questions
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Quiz a Yourself II!l
1. Scarcity a implies a that a the a allocation a decision a chosen a by a society a can
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a) not a make a more a of a any a one a good. II!l II!l II!l II!l II!l II!l
b) always a make a more a of a any a good. II!l II!l II!l II!l II!l
c) typically a make a more a of a one a good a but a at a the a expense a of II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l
a making a less a of a another.
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d) always a make a more a of a all a goods II!l II!l II!l II!l II!l
a simultaneously. a Explanation: a Scarcity a implies a that
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a choices a involve a trade-offs.
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AACSB: a Reflective a Thinking II!l II!l
a Accessibility: a Keyboard a Navigation
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a Blooms: a Understand
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Difficulty: a 02 a Medium II!l II!l
a Gradeable: a automatic
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a Learning aObjective: a 01-01
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Topic: a Economics a and a Opportunity a Cost
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2. A a production a possibilities a frontier a is a a a simple a model a of
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a) allocating a scarce a inputs a to a the a production a of a alternative a outputs. II!l II!l II!l II!l II!l II!l II!l II!l
a) price a and a production/consumption a in a a a market. II!l II!l II!l II!l II!l
b) the a cost a of a producing a goods. II!l II!l II!l II!l
c) the a number a of a inputs a required a to a produce a varying a levels a of a output.
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a Explanation: a The a production a possibilities a frontier a shows a the a quantity a of a two
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a goods a that a can a be a produced. a It a implies a that a scarcity a requires a that a choices
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a be a made a as a to a how a to a use a resources.
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AACSB: a Reflective a Thinking II!l II!l
a Accessibility: a Keyboard a Navigation
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a Blooms: a Understand
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Difficulty: a 02 a Medium II!l II!l
a Gradeable: a automatic
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a Learning aObjective: a 01-01
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Topic: a Modeling a Opportunity a Cost a Using a the a Production a Possibilities a Frontier
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,3. The a underlying a reason a that a there a are a unattainable a points a on a a a production
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a possibilities a frontier a is a that a there
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a. is a government. II!l
b. are a always a choices a that a must a be a made.
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c. are a scarce a resources a within a a a fixed a level a of a technology.
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d. is a unemployment a of a resources. II!l II!l II!l
Explanation: a The a points a outside a the a production a possibilities a frontier a are
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a unattainable. a This a means a that a currently a available a resources a and a technology a are
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a insufficient a to a produce a amounts a greater a than a those a illustrated a on a the a frontier.
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a On a a a graph, a everything a beyond a the a frontier a is a unattainable.
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AACSB: a Reflective a Thinking II!l II!l
a Accessibility: a Keyboard a Navigation
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a Blooms: a Remember
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Difficulty: a 01 a Easy II!l II!l
a Gradeable: a automatic
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a Learning aObjective: a 01-01
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Topic: a Modeling a Opportunity a Cost a Using a the a Production a Possibilities a Frontier
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4. The a underlying a reason a production a possibilities a frontiers a are a likely a to a be
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a bowed a out a (rather a than a linear) a is a because
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a. choices a have a consequences. II!l II!l
b. there a are a always a opportunity a costs. II!l II!l II!l II!l
c. some a resources a and a people a can a be a better a used a producing a one
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a good a rather a than a another.
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d. there a is a always a some a level a of a unemployment.II!l II!l II!l II!l II!l II!l
Explanation: a If a the a production a possibilities a frontier a is a not a a a line a but a is
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a bowed a out a away a from a the a origin, a then a opportunity a cost a is a increasing. a The
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a reason a for a this a is a that a as a we a add a more a resources a to a the a production a of, a for
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a example, a pizza, a we a are a using a fewer a resources a to a produce a soda.
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a Compounding a that a problem, a at a each a stage a as a we a take a the a resources a away
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a from a soda a and a put a them a into a pizza, a we a are a moving a workers a who a are
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a worse a at a pizza a production a and a better a at a soda a production a than a those a moved
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a in a the a previous a stage. a This a means a that a the a increase a in a pizza a production a is
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a diminishing a and a the a loss a in a soda a production a is a increasing. a An a economist
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a would a call a this a an a example a of a increasing a opportunity a cost. a If a the a production
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a possibilities a frontier a is a a a straight a line a that a is a not a bowed a out a away a from a the
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a origin, a then a opportunity a cost a is a constant.
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AACSB: a Knowledge a Application II!l II!l
a Accessibility: a Keyboard a Navigation
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a Blooms: a Remember
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Difficulty: a 01 a Easy II!l II!l
a Gradeable: a automatic
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a Learning aObjective: a 01-02
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Topic: a Attributes a of a the a Production a Possibilities a Frontier
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, 5. Suppose a you a were a modeling a the a impact a of a the a introduction a of a computer
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a automation a into a manufacturing a on a a a production a possibilities a frontier a (PPF)
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a with a two a manufactured a goods a on a their a respective a axes. a It a would a be a more
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a likely a that a the a result a would a be a
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a) generalized a growth a with a the a PPF a moving a both a up a and a to a the a right. II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l
b) specialized a growth a with a the a PPF a moving a both a up a and a to a the a right. II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l
c) generalized a growth a with a the a PPF a just a moving a up a and a not a to a the a right. II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l
d) specialized a growth a with a the a PPF a just a moving a up a and a not a to a the II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l II!l
a right. a Explanation: a Computer a automation a is a a a general a improvement a in
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a technology a so a it a would a improve a all a manufacturing. a As a a a result, a it a would
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a result a in a generalized a growth a and a move a the a PPF a both a up a and a to a the a right.
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AACSB: a Knowledge a Application II!l II!l
a Accessibility: a Keyboard a Navigation
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a Blooms: a Remember
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Difficulty: a 01 a Easy II!l II!l
a Gradeable: a automatic
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a Learning aObjective: a 01-03
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a Topic: a Economic a Growth
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6. The a optimization a assumption a suggests a that a people a make
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a. irrational a decisions. II!l
b. unpredictable a decisions. II!l
c. decisions a to a make a themselves a as a well a off a as a possible. II!l II!l II!l II!l II!l II!l II!l II!l
d. decisions a without a thinking a very a hard. II!l II!l II!l II!l
Explanation: a The a optimization a assumption a suggests a that a the a person a in a question
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a is a trying a to a maximize a some a objective. a Consumers a are a assumed a to a be
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a making a decisions a that a maximize a their a happiness a subject a to a a a scarce a amount
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a of a money.
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AACSB: a Reflective a Thinking II!l II!l
a Accessibility: a Keyboard a Navigation
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a Blooms: a Remember
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Difficulty: a 01 a Easy II!l II!l
a Gradeable: a automatic
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a Learning aObjective: a 01-01
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Topic: a Thinking a Economically
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