Question 4) Suppose that Australia can only produce two products: cars and wheat. The following table shows the different amounts of outputs Australia can produce. (All numbers below are simplified to make calculations easier). Cars Wheat
(in tonnes)
1,000 0
500 200
400 240
0 400

a. Draw the Production Possibility Frontier (PPF) for the economy of Australia
b. Based on data from the above table, what is the opportunity cost of producing one car in Australia? What is the opportunity cost of producing one tonne of wheat?
c. Suppose that there has been a technological breakthrough in the car industry in Australia. A maximum of 1,500 cars can be now produced. Meanwhile, things remain the same for wheat production. Draw the new PPF (after the advancement in technology). Compare between the new PPF and the original PPF.
d. In the real world, a typical PPF is usually not a straight line but a concave (bowed out) curve. Use the concept of increasing marginal opportunity cost to explain why PPFs are usually concave curves

The management of a private investment club has a fund of $250,000 earmarked for investment in stocks. to arrive at an acceptable overall level of risk, the stocks that management is considering have been classified into three categories: high risk (x), medium risk (y), and low risk (z). management estimates that high risk stocks will have a rate of return of 15%/year; medium risk stocks, 10%/year; and low risk stocks, 6%/year. the amount of money invested in low risk stocks is to be twice the sum of the amount invested in stocks of the other two categories. if the investment goal is to have a rate of return of 9% on the total investment, determine how much the club should invest in each type of stock. (assume that all the money available for investment is invested.)

An outside manufacturer has offered to produce 60,000 daks and ship them directly to andretti's customers. if andretti company accepts this offer, the facilities that it uses to produce daks would be idle; however, fixed manufacturing overhead costs would be reduced by 75%. because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two-thirds of their present amount. what is andretti's avoidable cost per unit that it should compare to the price quoted by the outside manufacturer?

In year 1, the bennetts' 25-year-old daughter, jane, is a full-time student at an out-of-state university but she plans to return home after the school year ends. in previous years, jane has never worked and her parents have always been able to claim her as a dependent. in year 1, a kind neighbor offers to pay for all of jane's educational and living expenses. which of the following statements is most accurate regarding whether jane's parents would be allowed to claim an exemption for jane in year 1 assuming the neighbor pays for all of jane's support? a. no, jane must include her neighbor's gift as income and thus fails the gross income test for a qualifying relative. b.yes, because she is a full-time student and does not provide more than half of her own support, jane is considered her parent's qualifying child. c.no, jane is too old to be considered a qualifying child and fails the support test of a qualifying relative. d.yes, because she is a student, her absence is considered as "temporary." consequently she meets the residence test and is a considered a qualifying child of the bennetts.