Question

Fill in the blanks: Suppose that Jake and Jill have the ability to pick either apples or strawberries. The following table shows how much they can pick in one hour. Quantity Picked in One Hour Pounds of Apples Pounds of Strawberries 11010 For Jake, the opportunity cost of picking one pound of apples is 0.5 pound(s) of strawberries, and the opportunity cost of picking one pound of strawberries is of apples. For Jill, the opportunity cost of picking one pound of apples is pound(s) of strawberries, and the opportunity cost of picking one pound of strawberries is pound(s) of apples.

question 2

question 3

Answer 1

Question 1.

Jake can pick either 8 pounds of Apples or 4 pounds of strawberries.

Jack opportunity cost of picking one pound of apples = (4 / 8) = 0.5 pounds of strawberries.

Jack opportunity cost of picking one pound of strawberries = (8/4) = 2 pounds of apples.

------------------------------------------------------------------------------------------------------------------------------

Jill can pick either 10 pounds of Apples or 10 pounds of strawberries.

Jill opportunity cost of picking one pound of apples = (10 / 10) = 1 pounds of strawberries.

Jill opportunity cost of picking one pound of strawberries = (10/10) = 1 pounds of apples.

Question 2.

(Market economy): An economy with free exchange of goods and services:

(Command economy) : An economy in which the government has most broad power to allocate the use of factors of production.

(Mixed economy): A market economy in which government also plays a role in allocating resources.

(Capitalism): A system in which resources are owned by the private individuals who have the power to make decisions about their use.

Question 3:

Any combination of goods which lies inside the PPF are inefficient.

Any combinatoin of goods which lies on the PPF are efficienct.

Any combination of goods which lies outside the PPF are impossible.

200 bicycles, 20 trucks (inefficient)

500 bicycles, 0 trucks (efficient)

400 bicycles, 40 trucks (impossible)

0 bicycles, 50 trucks (efficient)