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Solution Manual for Issues in Economics Today 10th Edition by Robert Guell
Solution Manual for Issues in Economics Today 10th Edition by Robert Guell
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SOLUTION ty MANUAL ty FORIssues tyin tyEconomics tyToday ty10th tyEdition tyby tyRobert tyGuell
Chapter ty1-47
Chapter ty1
End tyof tyChapter tyQuestions
Quiz tyYourself
1. Scarcity tyimplies tythat tythe tyallocation tydecision tychosen tyby tysociety tycan
a) not tymake tymore tyof tyany tyone tygood.
b) always tymake tymore tyof tyany tygood.
c) typically tymake tymore tyof tyone tygood tybut tyat tythe tyexpense tyof
tymaking tyless tyof tyanother.
d) always tymake tymore tyof tyall tygoods
tysimultaneously. tyExplanation: tyScarcity tyimplies tythat
tychoices tyinvolve tytrade-offs.
AACSB: tyReflective tyThinking
tyAccessibility: tyKeyboard tyNavigation
tyBlooms: tyUnderstand
Difficulty: ty02 tyMedium
tyGradeable: tyautomatic
tyLearning tyObjective: ty01-01
Topic: tyEconomics tyand tyOpportunity tyCost
2. A typroduction typossibilities tyfrontier tyis tya tysimple tymodel tyof
a) allocating tyscarce tyinputs tyto tythe typroduction tyof tyalternative tyoutputs.
a) price tyand typroduction/consumption tyin tya tymarket.
b) the tycost tyof typroducing tygoods.
c) the tynumber tyof tyinputs tyrequired tyto typroduce tyvarying tylevels tyof tyoutput.
t y Explanation: tyThe typroduction typossibilities tyfrontier tyshows tythe tyquantity tyof tytwo
tygoods tythat tycan tybe typroduced. tyIt tyimplies tythat tyscarcity tyrequires tythat tychoices
tybe tymade tyas tyto tyhow tyto tyuse tyresources.
AACSB: tyReflective tyThinking
tyAccessibility: tyKeyboard tyNavigation
tyBlooms: tyUnderstand
Difficulty: ty02 tyMedium
tyGradeable: tyautomatic
tyLearning tyObjective: ty01-01
Topic: tyModeling tyOpportunity tyCost tyUsing tythe tyProduction tyPossibilities tyFrontier
Page ty1
© tyMCGRAW tyHILL tyLLC. tyALL tyRIGHTS tyRESERVED. tyNO tyREPRODUCTION tyOR tyDISTRIBUTION
tyWITHOUT tyTHE tyPRIOR t y WRITTEN tyCONSENT tyOF tyMCGRAW tyHILL tyLLC.
,3. The tyunderlying tyreason tythat tythere tyare tyunattainable typoints tyon tya typroduction
typossibilities tyfrontier tyis tythat tythere
a. is tygovernment.
b. are tyalways tychoices tythat tymust tybe tymade.
c. are tyscarce tyresources tywithin tya tyfixed tylevel tyof tytechnology.
d. is tyunemployment tyof tyresources.
Explanation: tyThe typoints tyoutside tythe typroduction typossibilities tyfrontier tyare
tyunattainable. tyThis tymeans tythat tycurrently tyavailable tyresources tyand tytechnology tyare
tyinsufficient tyto typroduce tyamounts tygreater tythan tythose tyillustrated tyon tythe tyfrontier.
tyOn tya tygraph, tyeverything tybeyond tythe tyfrontier tyis tyunattainable.
AACSB: tyReflective tyThinking
tyAccessibility: tyKeyboard tyNavigation
tyBlooms: tyRemember
Difficulty: ty01 tyEasy
tyGradeable: tyautomatic
tyLearning tyObjective: ty01-01
Topic: tyModeling tyOpportunity tyCost tyUsing tythe tyProduction tyPossibilities tyFrontier
4. The tyunderlying tyreason typroduction typossibilities tyfrontiers tyare tylikely tyto tybe
tybowed tyout ty(rather tythan tylinear) tyis tybecause
a. choices tyhave tyconsequences.
b. there tyare tyalways tyopportunity tycosts.
c. some tyresources tyand typeople tycan tybe tybetter tyused typroducing tyone
tygood tyrather tythan tyanother.
d. there tyis tyalways tysome tylevel tyof tyunemployment.
Explanation: tyIf tythe typroduction typossibilities tyfrontier tyis tynot tya tyline tybut tyis tybowed
tyout tyaway tyfrom tythe tyorigin, tythen tyopportunity tycost tyis tyincreasing. tyThe tyreason
tyfor tythis tyis tythat tyas tywe tyadd tymore tyresources tyto tythe typroduction tyof, tyfor
tyexample, typizza, tywe tyare tyusing tyfewer tyresources tyto typroduce tysoda. tyCompounding
tythat typroblem, tyat tyeach tystage tyas tywe tytake tythe tyresources tyaway tyfrom tysoda tyand
typut tythem tyinto typizza, tywe tyare tymoving tyworkers tywho tyare tyworse tyat typizza
typroduction tyand tybetter tyat tysoda typroduction tythan tythose tymoved tyin tythe typrevious
tystage. tyThis tymeans tythat tythe tyincrease tyin typizza typroduction tyis tydiminishing tyand
tythe tyloss tyin tysoda typroduction tyis tyincreasing. tyAn tyeconomist tywould tycall tythis tyan
tyexample tyof tyincreasing tyopportunity tycost. tyIf tythe typroduction typossibilities tyfrontier
tyis tya tystraight tyline tythat tyis tynot tybowed tyout tyaway tyfrom tythe tyorigin, tythen
tyopportunity tycost tyis tyconstant.
AACSB: tyKnowledge tyApplication
tyAccessibility: tyKeyboard tyNavigation
tyBlooms: tyRemember
Difficulty: ty01 tyEasy
tyGradeable: tyautomatic
tyLearning tyObjective: ty01-02
Topic: tyAttributes tyof tythe tyProduction tyPossibilities tyFrontier
Page ty2
© tyMCGRAW tyHILL tyLLC. tyALL tyRIGHTS tyRESERVED. tyNO tyREPRODUCTION tyOR tyDISTRIBUTION
tyWITHOUT tyTHE tyPRIOR t y WRITTEN tyCONSENT tyOF tyMCGRAW tyHILL tyLLC.
,5. Suppose tyyou tywere tymodeling tythe tyimpact tyof tythe tyintroduction tyof tycomputer
tyautomation tyinto tymanufacturing tyon tya typroduction typossibilities tyfrontier ty(PPF)
tywith tytwo tymanufactured tygoods tyon tytheir tyrespective tyaxes. tyIt tywould tybe tymore
tylikely tythat tythe tyresult tywould tybe ty .
a) generalized tygrowth tywith tythe tyPPF tymoving tyboth tyup tyand tyto tythe tyright.
b) specialized tygrowth tywith tythe tyPPF tymoving tyboth tyup tyand tyto tythe tyright.
c) generalized tygrowth tywith tythe tyPPF tyjust tymoving tyup tyand tynot tyto tythe tyright.
d) specialized tygrowth tywith tythe tyPPF tyjust tymoving tyup tyand tynot tyto tythe
tyright. tyExplanation: tyComputer tyautomation tyis tya tygeneral tyimprovement tyin
tytechnology tyso tyit tywould tyimprove tyall tymanufacturing. tyAs tya tyresult, tyit tywould
tyresult tyin tygeneralized tygrowth tyand tymove tythe tyPPF tyboth tyup tyand tyto tythe tyright.
AACSB: tyKnowledge tyApplication
tyAccessibility: tyKeyboard tyNavigation
tyBlooms: tyRemember
Difficulty: ty01 tyEasy
tyGradeable: tyautomatic
tyLearning tyObjective: ty01-03
tyTopic: tyEconomic tyGrowth
6. The tyoptimization tyassumption tysuggests tythat typeople tymake
a. irrational tydecisions.
b. unpredictable tydecisions.
c. decisions tyto tymake tythemselves tyas tywell tyoff tyas typossible.
d. decisions tywithout tythinking tyvery tyhard.
Explanation: tyThe tyoptimization tyassumption tysuggests tythat tythe typerson tyin tyquestion
tyis tytrying tyto tymaximize tysome tyobjective. tyConsumers tyare tyassumed tyto tybe
tymaking tydecisions tythat tymaximize tytheir tyhappiness tysubject tyto tya tyscarce tyamount
tyof tymoney.
AACSB: tyReflective tyThinking
tyAccessibility: tyKeyboard tyNavigation
tyBlooms: tyRemember
Difficulty: ty01 tyEasy
tyGradeable: tyautomatic
tyLearning tyObjective: ty01-01
Topic: tyThinking tyEconomically
7. Imagine tyan tyeconomist tyordering tydonuts tyone-by-one. tyWhen tydeciding tyhow
tymany tydonuts tyto tyorder tythey tywould typick tythat tynumber tywhere tythe tyenjoyment tyof
tythe ty equals tythe
tyenjoyment tythey tycould tyget tyfrom tyusing tythe tymoney tyon tyanother tygood.
a. first tydonut
b. last/marginal tydonut
c. average/typical tydonut
d. total tynumber tyof tydonuts
Explanation: tyThe tyenjoyment tyof tythe tylast tyslice tyis tythe tymarginal tybenefit tyof tythat
tyslice. tyIf tythis tyenjoyment tyis tymore tythan tythe tyenjoyment tyfrom tysome tyalternative,
Page ty3
© tyMCGRAW tyHILL tyLLC. tyALL tyRIGHTS tyRESERVED. tyNO tyREPRODUCTION tyOR tyDISTRIBUTION
tyWITHOUT tyTHE tyPRIOR t y WRITTEN tyCONSENT tyOF tyMCGRAW tyHILL tyLLC.
, tymore tywill tybe tyconsumed.
AACSB: tyReflective tyThinking
Page ty4
© tyMCGRAW tyHILL tyLLC. tyALL tyRIGHTS tyRESERVED. tyNO tyREPRODUCTION tyOR tyDISTRIBUTION
tyWITHOUT tyTHE tyPRIOR t y WRITTEN tyCONSENT tyOF tyMCGRAW tyHILL tyLLC.
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