The author weaves memorable examples from pop culture throughout this edition and bolsters student interest by illustrating the unexpected places macroeconomics occur. Previews: About the Author Karl E. Case is Professor of Economics Emeritus at Wellesley College where he has taught for 34 years and served several tours of duty as Department Chair. Professor Case received his B. He is author or coauthor of five books, including Principles of Economics, Economics and Tax Policy, and Property Taxation: The Need for Reform, and he has published numerous articles in professional journals.
For the last 25 years, his research has focused on real estate markets and prices. He has authored numerous professional articles, many of which attempt to isolate the causes and consequences of boom and bust cycles and their relationship to regional and national economic performance. Ray C. Fair is Professor of Economics at Yale University. He received a B. He taught at Princeton University from to and has been at Yale since He also has done work in the areas of finance, voting behavior, and aging in sports.
Professor Fair has taught introductory and intermediate macroeconomics at Yale. He has also taught graduate courses in macroeconomic theory and macroeconometrics. Many teachers have found that having students work with the U. Sharon M. Professor Oster joined Case and Fair as a coauthor in the ninth edition of this book.
Professor Oster has a B. She has worked on problems of diffusion of innovation in a number of different industries, on the effect of regulations on business, and on competitive strategy. She has published a number of articles in these areas and is the author of several books, including Modern Competitive Analysis and The Strategic Management of Nonprofits.
In the department, Professor Oster taught introductory and intermediate microeconomics to undergraduates as well as several graduate courses in industrial organization. Since , Professor Oster has taught primarily in the Management School, where she teaches the core microeconomics class for MBA students and a course in the area of competitive strategy. Professor Oster also consults widely for businesses and nonprofit organizations and has served on the boards of several publicly traded companies and nonprofit organizations.
Give an example to illustrate each of the following: a constant opportunity costs and b increasing opportunity costs. Answers will vary. Constant opportunity costs occur when increasing output of a good does not cause society to give up more and more resources in order to produce that good.
Although, at some point increasing opportunity costs will occur, over some level of output constant opportunity costs could prevail. Increasing opportunity costs occur when society has to give up more and more of one resource in order to obtain another resource. In order to hire more teachers, the college would have to hire individuals who had a higher opportunity cost. Most production possibilities frontiers are concave downward because the law of increasing opportunity costs holds.
This law says that as society devotes more resources to the production of a given good, the opportunity cost of producing that good will increase. The reason for this is that the most efficient resources will be used to initially produce that good. Only as those resources are used up will society employ less productive resources. Farmers will plant wheat in Kansas before they plant wheat in Alaska or Nevada. Within a PPF framework, explain each of the following: a a disagreement between a person who favors more domestic welfare spending and one who favors more national defense spending; b an increase in the population; and c a technological change that makes resources less specialized.
The first question deals with choices among possible output combinations along a frontier representing total government spending. The person favoring more welfare spending would prefer point C, while the person favoring more defense spending would prefer point D.
An increase in population, ceteris paribus, will shift the PPF outward, as in Exhibit 6 a. A technological change that makes resources less specialized will lessen the opportunity cost of switching production from one good to another.
The production possibility frontier will become less bowed outward straighter relative to the origin. Explain how to derive a production possibilities frontier. For instance, how is the extreme point on the vertical axis identified? How is the extreme point on the horizontal axis identified?
Once the extreme point on the vertical axis for example has been identified, other points can be identified by asking how much of that good must be given up in order increase production of the good on the horizontal axis by some discrete amount.
The production possibilities frontier can be derived by identifying all the points that show the combinations of both goods that can be produced in the economy. If the slope of the PPF is the same between any two points, what does this imply about costs? Explain your answer. A PPF slope that is the same between any two points implies that the opportunity cost of producing the two goods represented on the axes is constant.
The material standard of living would tend to decrease. The economy, as a whole, would have fewer goods and services to go around and would be distributing them to more people.
Consequently, each person would get less and less. Can a technological advancement in sector X of the economy affect the number of people who work in sector Y of the economy? A technological advancement in sector X makes it possible to produce X with fewer people, freeing those people to produce other things Y, for example. Use the PPF framework to explain something in your everyday life that was not mentioned in the chapter. Answers will vary, but should illustrate some of the following: choice, opportunity costs, productive inefficiency, scarcity, productive efficiency, unemployed resources, and growth.
Illustrate constant opportunity costs in a table similar to the one in Exhibit 1 a. Next, draw a PPF based on the data in the table. Illustrate increasing opportunity costs for one good in a table similar to the one in Exhibit 2 a.
Draw a PPF that represents the production possibilities for goods X and Y if there are constant opportunity costs. Next, represent an advance in technology that makes it possible to produce more of X, but not more of Y.
Finally, represent an advance in technology that makes it possible to produce more of Y, but not more of X. In the following figure, which graph depicts a technological breakthrough in the production of good X only?
Graph 3. The technological breakthrough allows more of good X to be produced, so the extreme point of the PPF on the horizontal axis shifts outward. In the preceding figure, which graph depicts a change in the PPF that is likely as a consequence of war? Graph 2. A likely consequence of war is decreased production of all goods leading to an inward shift of the PPF. If PPF2 in the following graph is the relevant production possibilities frontier, then which points are unattainable?
J, I and H are unattainable. They are farther from the origin than PPF2, which represents maximum possible output. If PPF1 in the preceding figure is the relevant production possibilities frontier, then which point s represent efficiency? Points A, B, and C represent efficiency because they are located on the frontier itself. By definition, a point on the frontier requires us to use all our existing resources and technology to their most efficient level.
Who has a comparative advantage in the production of good X? Of good Y? Tina gives up 50X to produce 25Y — 50 and 0 — David gives up 25X to produce 40Y 50 — 25 and 0 — Arnold - Free Download PDF With innovative new pedagogical features, increased coverage of globalization, easy customization, and fully integrated digital options, Economics may be your perfect solution. Packed with intriguing pop culture examples, the text illustrates that economics is both a huge factor in how the world works, and an integral part of the day-to-day experiences of the average college student.
What Matters to You in the 9th Edition? Office Hours This new feature seeks to emulate the kinds of questions you bring to Economics instructors after class.
Incorporating Thinking Like an Economist into the narrative of each chapter helps to better emphasize the importance of developing this skill—to view the world through the lens of economic analysis. Enhanced Globalization Coverage This chapter has been significantly expanded, revised and updated.
It now offers a total picture of how globalization affects the U. File Name: roger arnold macroeconomics 12th edition pdf. Principles of Macroeconomics. Part If there are only two goods, rivalling the claimed outputs of larger turbines owing to it's built-in MPPT technology, guns and butter. The Rutland i punches well above its size for power.
There is an opportunity cost associated with each choice whenever there is a movement along a PPF. A productive efficient society a. Branding your topics will give more credibility to your content, position you as a professional edtion and generate conversions and leads. Using the data in Problem 8, prove that both Tina and David can be made better off through specialization and trade. Updated Cathodic protection.
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