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Tutorial 1 (Chapter 1: Introduction To Economics)

This document contains two practice questions from a tutorial on Chapter 1 of an economics introduction textbook. Question 1 asks the student to analyze a production possibility frontier (PPF) table showing the tradeoffs between food and cloth production. It involves drawing the PPF curve, calculating opportunity costs, and identifying efficient and inefficient production points. Question 2 similarly analyzes a production possibility curve (PPC) table showing tradeoffs between motorcycle and car production. It asks the student to draw the PPC, calculate opportunity costs, and explain how the curve would shift in response to changes in technology or economic conditions.

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149 views2 pages

Tutorial 1 (Chapter 1: Introduction To Economics)

This document contains two practice questions from a tutorial on Chapter 1 of an economics introduction textbook. Question 1 asks the student to analyze a production possibility frontier (PPF) table showing the tradeoffs between food and cloth production. It involves drawing the PPF curve, calculating opportunity costs, and identifying efficient and inefficient production points. Question 2 similarly analyzes a production possibility curve (PPC) table showing tradeoffs between motorcycle and car production. It asks the student to draw the PPC, calculate opportunity costs, and explain how the curve would shift in response to changes in technology or economic conditions.

Uploaded by

eira
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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TUTORIAL 1

(Chapter 1: Introduction to Economics)


Question 1
Based on the table below
Possible Food (million) Cloth (million)
Production
A 0 110
B 20 100
C 40 80
D 60 50
E 80 0

a. Draw the production possibility frontier (PPF)


i. Indicate the shape of PPF.
ii. State type of opportunity cost.
b. Calculate the opportunity cost of production additional 1 million of
Foods.
i. Point A to B
ii. Point B to C
iii. Point C to D
iv. Point D to E
c. Calculate the opportunity cost of production additional 1 million of
Cloths.
i. Point A to B
ii. Point B to C
iii. Point C to D
iv. Point D to E
d. State the points are efficient.
e. Indicate area of the production is not efficient but firm able to
produce.
f. Indicate area of the production that impossible for firm to produce.
Question 2
The production possibility frontier is linear and opportunity cost is constant.
Choice Motorcycle (million) Car (million)
A 0 8
B 1 6
C 2 4
D 3 2
E 4 0
a. Draw the production possibility Curve (PPC)
i. Indicate the shape of PPC.
ii. State type of opportunity cost.
b. Calculate the opportunity cost of production additional 1 million of
Motorcycle.
i. Point A to B
ii. Point D to E
c. Calculate the opportunity cost of production additional 1 million of
Car.
i. Point B to C
ii. Point C to D
d. If the technology in production car increases, what happen to the
PPC?
e. If the technology in production motorcycle increases, what happen to
the PPC?
f. If the technology in both production increases, what happen to the
PPC?
g. If country face an economic recession, what happen to the PPC?
h. If firm decided to cut off the number of workers in both production,
what happen to the PPC?
i. If country face an economic growth, what happen to the PPC?

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