Group assignment presentation 1 | Microeconomics | Trường Đại học Quốc tế, Đại học Quốc gia Thành phố Hồ Chí Minh

Group assignment presentation 1
Exercise 1. Use the following production possibilities table for war goods and
civilian goods to answer questions A to E a. 14 12 H 10 E 8 illions) D 6 ar (in m C C 4 G B 2 A 0 0 5 10 15 20 25 30 35 40 Guided missiles (in thousands)
b. There are increasing opportunity costs for the production of missiles.
If the economy is currently at point C:
- The costs of one million more car: 4.5thousands guided car.
- The costs of one thousand more guided missiles: 0.2 million cars. c. Th
e point G inside the curve of the graph shows that the inefficiency of country’s resources.
d. - The point H outside the PPF curve indicates the impossible by this economy.
- Development in technology, amount of human resources, more labors,…
e. - New PPF curve : the yellow line
- A curve that reflects technological improvement in the production of both products: the red line.
Exercise 2. Assume that a simple economy has 2 industries which produce
wheat and cloths. Resources to produce these products are scarce and used
effectively. The following table represents the possible combinations of output
between wheat and cloths that this economy produces in a given year. a. 30 A 25 B 20 C 15 at (tons) Whe D 10 5 E 0 0 2 4 6 8 10 12 Cloths (1000 set)
b. If output of wheat and cloths are 9 tons of wheat and 4000 set of cloths,
productive of this economy is ineffective.
c. Produce 20 tons of wheat and 10 000 set of cloths are impossible by this economy. d. Opportunity costs
A – B: reduce 5 tons of wheat, g et 4000 set of cloth.
B – C: reduce 5 tons of wheat, g et 3000 set of cloth
C – D :reduce 5 tons of wheat, get 2000 set of cloth
D – E: reduce 9 tons of wheat, get 1000 set of cloth. And reverse.
- At point A: The cost of 1000 more set of cloths is 1.25 tons of wheat.
- At point B: The cost of 1000 more set of cloths is 1.67 tons of wheat.
The cost of 1 more tons of wheat is 800 set of cloths.
- At point C: The cost of 1000 more set of cloths is 3 tons of wheat.
The cost of 1 more tons of wheat is 600 set of cloths.
- At point D: The cost of 1000 more set of cloths is 9 tons of wheat.
The cost of 1 more tons of wheat is 333 set of cloths.
- At point E: The cost of 1 more tons of wheat is 111 set of cloths.