Unit 1 Assignment 1 Problems
Chapter 1: Problem 5, A-D, Page 21
Chapter 3: Problem 7, A-D, Page 68
Angela Besler
Capella University MBA6008
January 12, 2014

Unit 1 Assignment 1 Problems
Chapter 1: Problem 5, A-D, Page 21 A. Table and Graph: Types of Production | | Automobiles | Forklifts | | 0 | 30 | A | Production
Alternatives | 2 | 27 | B | | 4 | 21 | C | | 6 | 12 | D | | 8 | 0 | E | |

A production possibility “curve displays the different combinations of goods and services that society can produce in a fully, employed economy, assuming a fixed availability of supplies of resources and fixed technology” (McConnell and Et. Al., 2012).
The specific assumptions that a production possibilities curve has is that of: * Full employment: employing all available resources * Fixed resources: quantity/quality of production factors fixed * Fixed technology: methods used to produce output(state of technology) constant * Two goods: economy produce only two goods; both consumer and capital goods (McConnell and Et. Al., 2012). “Each point on the curve represents some maximum output of two products” (McConnell and Et. Al., 2012).
“Gross Domestic Production (GDP is the total market value of all final goods/services produced annually within boundaries of US, whether by US or foreign supplied resources” (McConnell and Et. Al., 2012).
“Net Domestic Production (NDP) is the GDP less part of the year’s output that needed to replace capital goods worn out in producing output; nation’s total output available for consumption or additions to capital stock” (McConnell and Et. Al., 2012).
“National Income (NI) is the total income earned by resource suppliers for their contributions to GDP plus taxes on production and imports; sum of wages and salaries, rent, interest, profit, proprietors income, and such taxes” (McConnell and