Consider a Country That Has Two Industries

question 40

Multiple Choice

Consider a country that has two industries. In the north, they grow wild rice, which requires a lot of rainfall. In the south, they grow wheat, which requires just a moderate amount of rainfall (too much rainfall is bad for wheat production) . One year, there is a record rainfall. This will result in

• A)a parallel shift inward of the production possibilities frontier.
• B)a parallel shift outward of the production possibilities frontier.
• C)the production possibilities frontier rotating, with the wild rice intercept increasing, and the wheat intercept decreasing.
• D)the production possibilities frontier rotating, with the wild rice intercept decreasing, and the wheat intercept increasing.
• E)the production possibilities frontier becoming linear.

Understand the role of government intervention in providing public goods and mitigating externalities.

Identify the characteristics and examples of club goods.

Comprehend the economic rationale behind the allocation of goods in markets.

Discuss the implications of goods being either excludable or rival in consumption.

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Definitions:

Height

The measurement of an object or point in relation to ground level or a base level, typically considered vertical distance.

Coefficient Of Determination

A statistical measure that assesses the proportion of the variance in the dependent variable that is predictable from the independent variable(s), commonly represented as R^2.

Variation

The measure of the spread or dispersion of a set of values.

Standard Error Of Estimate

A measure of the accuracy of predictions made with a regression line, specifically, it estimates the standard deviation of the error term.