Microeconomics 12th Edition Solutions Manual Michael Parkin. Solutions Manual , Answer key, Instructor's Resource Manual, Instructor's. Solutions Manual for. Microeconomics, 12th Edition. Michael Parkin, University of Western Ontario. © |Pearson | Available. MyLab. Share this page. Microeconomics, 12th Edition. Microeconomics (12th Edition) (Pearson Series in Economics): Michael Parkin is Professor Emeritus in the Department of Economics at the.
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Microeconomics/Michael Parkin. Michael Parkin is Professor Emeritus in the Department of Economics at Microsoft® Word and Adobe® PDF files of the. Request PDF on ResearchGate | Microeconomics / Michael Parkin | Editado simultáneamente en español Incluye índice. link-marketing.info Find an example of the distinction between microeconomics and macroeconomics in.
Remember me on this computer. Testing the predictions of models makes it necessary to disentangle cause and effect. Why does the PPF bow outward and what does that imply about the relationship between opportunity cost and the quantity produced? The amount of entertainment available in the economy increases which benefits society. It includes only those features that are necessary to understand the issue under study. A reorganized Chapter 17 brings together all the material on externalities both negative and positive.
Any point inside the frontier reflects production where one or both outputs may be increased without decreasing the other output level. Clearly, such points cannot be production efficient. How does the production possibilities frontier show that every choice involves a tradeoff?
Movements along the PPF frontier illustrate that producing more of one good requires producing less of other good. This observation reflects the result that a tradeoff must be made when producing output efficiently. How does the production possibilities frontier illustrate opportunity cost?
The negative slope of the production possibility curve illustrates the concept of opportunity cost. Moving along the production possibility frontier, producing additional. This sacrifice is the opportunity cost of producing more of the first good.
Why is opportunity cost a ratio? The slope of the PPF is a ratio that expresses the quantity of lost production of the good on the y -axis to the increase in the production of the good on the x -axis moving downward along the PPF.
The steeper the slope, the greater ratio, and the greater is the opportunity cost of increasing the output of the good measured on the horizontal axis.
Why does the PPF bow outward and what does that imply about the relationship between opportunity cost and the quantity produced? Some resources are better suited to produce one type of good or service, like pizza.
You've reached the end of this preview. Use headlines from the recent news to illustrate the potential for conflict between self-interest and the social interest.
One example of an issue concerns the income necessary to live in an apartment building in San Francisco. The owner is following his self-interest because he wants to have only high-income residents who, presumably, create less damage and might be willing to pay more rent. She believes that the social interest is served by having a variety of tenants in the apartments.
Page 10 1. Explain the idea of a tradeoff and think of three tradeoffs that you have made today. A tradeoff reflects the point that when someone gets one thing, something else must be given up. What is given up is the opportunity cost of whatever is obtained. Three examples of tradeoffs that are common to students include: The opportunity cost of the decision is a lower grade on the exam. The potential opportunity cost of the decision is the goods and services that cannot be purchased if the student receives an expensive parking ticket.
The opportunity cost for the higher income is less leisure and lower grades in classes. A rational choice is one that compares the costs and benefits of the different actions and then chooses the action that has the greatest benefit over cost for the person making the choice.
Three rational choices made by students include: In this case the benefit is the higher grade in the class and the cost is the breakfast forgone.
In this case the benefit is the resulting higher grade in the class and the cost is the conversation forgone. In this case the benefit is the fact the student will have clean clothes to wear and the cost is the loss of the entertainment the television show would have provided.
Explain why opportunity cost is the best forgone alternative and provide examples of some opportunity costs that you have faced today. When a decision to undertake one activity is made, often many alternative activities are no longer possible. Often these activities are mutually exclusive so only the highest valued alternative is actually forgone. But in this case, it is impossible to both sleep in and to jog during the hour, so the opportunity cost cannot be both activities.
What is lost is only the activity that otherwise would have been chosen—either sleeping in or jogging—which is whatever activity would have been chosen, that is, the most highly valued of the forgone alternatives. For students, attending class, doing homework, studying for a test are all activities with opportunity costs. Explain what it means to choose at the margin and illustrate with three choices at the margin that you have made today.
Choosing at the margin means choosing to do a little more or a little less of some activity. Three common examples students encounter are: Explain why choices respond to incentives and think of three incentives to which you have responded today. People making rational decisions compare the marginal benefits of different actions to their marginal costs.
Just as everyone else, students respond to incentives; a A student studies because of the incentives offered by grades. Page 11 1. Distinguish between a positive statement and a normative statement and provide examples. A positive statement is a description of how the world is. It is testable. A normative statement is a description of how the world ought to be.
It is, by its very nature, not testable because there is no universally approved criterion by which the statement can be judged. What is a model? Can you think of a model that you might use in your everyday life? A model is a description of some aspect of the economic world.
It includes only those features that are necessary to understand the issue under study. An economic model is designed to reflect those aspects of the world that are relevant to the user of the model and ignore the aspects that are irrelevant. A typical model is a GPS map. It reflects only those aspects of the real world that are relevant in assisting the user in reaching his or her destination and avoids using information irrelevant to travel.
How do economists try to disentangle cause and effect? Economists use models to understand some aspect of the economic world. Testing the predictions of models makes it necessary to disentangle cause and effect. To overcome this problem, economists have three methods of testing their models: Using a natural experiment, using a statistical investigation, and using economic experiments. A natural experiment is a situation that arises in the ordinary course of life in which one factor being studied varies and the other factors are the same.
This method allows the economist to focus on the effect from the factor that differs between the two situations. A statistical investigation looks for correlations between variables but then determining whether the correlation actually reflects causation can be difficult. How is economics used as a policy tool?
Individuals use the economic ideas of marginal benefit and marginal cost when making decisions for such topics as attending college, paying cash or credit for a purchase, and working. Businesses also use the concepts of marginal benefit and marginal cost when making decisions about what to produce, how to produce, and even how many hours to stay open.
Finally governments also use marginal benefit and marginal cost when deciding issues such as the level of property taxes, the amount to fund higher education, or the level of a tariff on Brazilian ethanol. Apple Inc. Which of the following pairs does not match?
Labor and wages Labor earns wages, so this pair matches. Land and rent Land earns rent, so this pair matches. Entrepreneurship and profit Entrepreneurship earns profit, so this pair matches.
Capital and profit Capital earns interest, so this pair does not match. Explain how the following news headlines concern self-interest and the social interest. For instance, more Chinese citizens might drink coffee rather than tea and fewer coffee shops run by Chinese firms might open. The social interest is affected because more people will drink coffee rather than other drinks such as sodas.
Food Must Be Labeled with Nutrition Data The decision to require that food must be labeled with nutrition information is made in the social interest. The night before an economics test, you decide to go to the movies instead of staying home and working your MyEconLab Study Plan.
You get 50 percent on your test compared with the 70 percent that you normally score. Did you face a tradeoff? Yes, you faced a tradeoff. The tradeoff was between a higher test score and an evening with your friends at the movies.
What was the opportunity cost of your evening at the movies? The opportunity cost of going to the movies is the fall in your grade.