Microeconomics (EBDB) Topic 1: Economics & Opportunity Cost Analysis | Microeconomics | Trường Đại học Quốc tế, Đại học Quốc gia Thành phố Hồ Chí Minh

Full name: Hoang Lam Phuong Class: EBDB6
Topic 1: Economics and Economic Issues Exercise 1:
a. There are increasing opportunity cost for the production of missiles.
b. If the economy is currently at point C:
The opportunity cost of one million more cars stands at approximately 4.5 thousands missiles.
The cost of one thousand more guided missiles is approximately 0.222 million cars.
c. Point G inside the graph indicates that this economy uses the resources inefficiently.
d. Label a point H that lies outside the PPF curve.
+ Point H outside the curve shows the level of production that the economy can not
achieve with current resources.
+ Constraints for the economy to attain the level of production indicated by point H:  Technological advancement.  Increase in resources.
 Improvement in production process.
e. Suppose improvement occurs in the technology of producing guided missiles but not in the production of cars.
- Draw the new PPF curve on the graph you created.
- Now draw a curve that reflects technological improvement in the production of both products. Exercise 2:
a. Draw the production possibility frontier (PPF) curve for this economy
b. If output of wheat and cloths are 9 tons of wheat and 4000 set of cloths, its production is ineffiecient.
c. Can this economy produce 20 tons of wheat and 10 000 sets of cloths?
It is impossible to produce 20 tons of wheat and 10 000 sets of cloths.
Because it is outside the PPF curve while an economic efficiency is
described at point A, B, C, D, E.
d. Calculate opportunity costs of producing wheat and cloths? Opportunity cost of producing Opportunity cost of producing
wheat (thousands set of cloths) cloths (tons of wheat) A-B 4 5 B-C 3 5 C-D 2 6 D-E 1 9