Questions On Problems And Applications

Questions On Problems And Applications
Chapter 1: Questions for Review: 1,5,8 Problems and Applications: 1,6,8,10 Chapter 2: Questions
for Review: 1,3,6,7 Problems and Applications: 3,4,5,6 Chapter 3: Questions for Review: 2,5
Problems and Applications: 1,2,7 Chapter 4: Questions for Review: 1,3,6,9 Problems and
Applications: 1,5,6,8,11 Chapter 1 Give three examples of important trade–offs that you face in your
life. Some examples of trade–offs that I face in my life are rather I should go to sleep early or
adding another hour of studying for a test. Another trade–off was that if I should watch some shows
online or study more for the final. The last trade–off is when I could spend my money to go out to
eat or I could save my money and eat at home. 5. ... Show more content on Helpwriting.net ...
6. The Social Security system provides income for people over age 65. If a recipient of Social
Security decides to work and earn some income, the amount he or she receives in Social Security
benefits is typically reduced. a. How does the provision of Social Security affect people's incentive
to save while working? People will save up less money if they know they will get money through
Social Security program from the government. b. How does the reduction in benefits associated with
higher earnings affect people's incentive to work past age 65? It will make people to work less or
barely work at all. 8. Explain whether each of the following government activities is motivated by a
concern about equality or a concern about efficiency. In the case of efficiency, discuss the type of
market failure involved. Regulating cable TV prices. The government is concern about efficiency.
The market failure has to do with the market power, this include with just a person or a group of
people that influences the market prices. Providing some poor people with vouchers that can be used
to buy food This shows the government 's concern about equality. Prohibiting smoking in public
places. This shows the government 's concern about efficiency.
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Macroeconomics Exercise
Questions in macroeconomics Instructor: MA. Bui Huy Khoi
Chapter 1
What is economics?
Top of Form
[pic]
Question 1
Resources in an economy:
a) Are always fixed
b) Can never decrease
c) Always increase over time
d) Are limited at any moment in time
[pic]
Question 2
Human wants are:
a) Always fixed
) Limited
c) Unlimited
d) Likely to decrease over time
[pic]
Question 3
The sacrifice involved when you choose a particular course of action is called the:
a) Alternative
b) Opportunity cost
c) Consumer cost
d) Producer cost
[pic]
Question 4

Which of the following is not one of the basic economic questions?
a) What to ... Show more content on Helpwriting.net ...
Capital
[pic]
Question 8
The resources in an economy are:
a) Constantly increasing
b) Fixed at any moment
c) Constantly decreasing
d) Able to be transferred easily between industries
[pic]
Question 9
Any combination of products inside the production possibility frontier is:
a) Allocatively inefficient
b) X inefficient
c) Consumer inefficient
d) Productively inefficient
[pic]
Question 10
An outward shift of the production possibility frontier may be caused by:
a) An increase in demand
b) More government spending
c) Better training of employees
d) Productive inefficiency
Top of Form
[pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic]
Bottom of Form
Chapter 2: National income and the standard of living
Top of Form
[pic]
Question 1
Gross National Product equals:
a) Net National Product adjusted for inflation
b) Gross Domestic Product adjusted for inflation

c) Gross Domestic Product plus net property income from abroad
d) Net National Product plus net property income from abroad
[pic]
Question 2
Net National Product equals:
a) Gross National Product adjusted for inflation
b) Gross Domestic Product adjusted for inflation
c) Gross Domestic Product plus net property income from abroad
d) Gross National Product minus depreciation
[pic]
Question 3
The standard of living is often measured by:
a)

Economic Models Are False And So Government Should Ignore...
Question 1. "Economic models are false and so government should ignore their predictions."
Explain, discuss and evaluate the accuracy of this statement. Answer 1: Economic models are the
imaginary concept which expresses economic procedure by using variables or quantitative
correlations. It is a simply method which uses mathematical and other technical aspects to show
complex processes. The statement stated above is false because with the help of the economic
models, government can predict about the future economy and make some changes in economic
behaviours to achieve highest possible outcome. Economy is an unstable factor and it has to be
monitored to understand and predict for the future benefit that is where the economic models are ...
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Beyond the PPF line, point 'E' is unattainable because resources are limited to get the further
outcome. At point 'D', the resources are not utilized fully which will creates the situation of
unemployment, less economic growth and many other economic impact. Any point inside the PPF
line is inefficient as either resources are not used fully or misallocated. Opportunity cost is the
choice made to get something by giving up another thing (Nash, n.d., para. 3). Here government
have two items to give emphasis computer and television. If government choose to produce
computer and wants to make digitalized study system then it has to forgone the television. In the
above figure, moving from point B to A, the quantity of television production increased by 2
thousands whereas the quantity of computer production decreased by 3 thousands. The opportunity
cost of 2 thousand televisions is 3 thousand computers (Besnek, 2017, slide 3). One of these
television cost 1.5 of computers production. Government must have to understand which the most
important thing to produce is and how to utilize the available resources efficiently to achieve the
maximum benefit for the country. This PPF model shows that, government have to accept and apply
the concept of predication in order to properly utilize the resources and get the maximum benefit.
Question 2. Using the economics or

Receiving Help with Childcare Costs from Employers and...
Receiving Help with Childcare Costs from Employers and Receiving a Tax Break
Employees who receive help with childcare costs from their employers are to receive a tax break.
Tax is how the government raises money to spend on public services, such as education, health and
the social security system. It can be levied on goods, services and range of transactions, such as
inheritance and profit made on the sale of homes or antiquities.
Workers will be able to receive up to £50 per week in subsidised childcare services, childcare
allowances or vouchers tax–free. Subsidies are grants given by the government to encourage
production. This will be able to favour workers and will make labour more ... Show more content on
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And as we already know that the quantity of inputs to the production process means that an
economy has increase its production potential.
Previously parents had only received tax free help if their employer managed the childcare facility.
The news came as the chancellor announced his twice yearly pre–Budget report. This stated that the
government has capped financial support at £50 a week – well below the typical cost of £128 a
week for a nursery place According to a recent survey, parents in the UK pay on average £6,650 a
year for each child.
Tax relief on £50 a week childcare spending could benefit millions of employees using registered
childcare. However, tax exemptions will only apply to spending on registered childcare. This stated
shows us how the government protects its people and not letting other people who come in the
country to take advantage of the economy. Many workers who rely on friends and relatives to look
after their children while they are at work will not benefit.
About one in ten employers provide some kind of childcare help to employees.
It is hoped that the tax break will encourage more firms to help out their workers and as a result has
received a warm welcome from childcare charities.
Stephen Burke, director of the Daycare Trust, said: "Paying for

The Production Possibilities Frontier
1. A reduction in trade barriers has two effects on the economy. The production possibilities frontier
will move outward, and the economy will move closer to the production possibilities frontier. Both
outcomes are related. Freer trade creates more markets for the country for its goods and services.
This allows companies to produce more, but it does not directly change the production capacity of
the nation. Thus, the economy moves closer to the production possibilities frontier (Rittenberg &
Tregarthen, 2009). The reason that the production possibilities frontier also moves owes to the
theory of comparative advantage. Freer trade allows the country to focus production on those goods
and services in which it has comparative advantage. Thus, the economy's production becomes more
efficient. Given that the factor resources (people, capital) have not changed, an increase in
efficiency will push the production possibilities frontier outward. This is because the total capacity
is going to be higher. Note that there is a difference between producing the same things more
efficiently, and producing goods that are more efficient. The total capacity of the economy is
changed when the mix of product and services is changed, marking a shift in the curve to go along
with moving production closer to the curve. In addition, trade encourages technological transfer.
Firms in each country learn from one another, and the transfer of knowledge and technology is one
way that this occurs.

Microeconomy Homework
Microeconomics – Homework 1 – due 28th January Choose the one alternative that best completes
the statement or answers the question Tick off your answer in the table on page 7 – do not forget to
write your name Economic concepts and reasoning 1) When the government chooses to increase
public spending on domestic security, its choice ________. A) involves a tradeoff with other public
services such as education, to allow more domestic security B) illustrates that scarcity does not
always exist C) involves no tradeoff because domestic security is necessary D) primarily affects
who gets the goods and services produced 2) Laura is a manager for HP. When Laura must decide
whether to produce a few additional printers, she is choosing ... Show more content on
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Based on the table above, for country B, the opportunity cost of producing an additional unit of X is
A) 4 units of Y per unit of X B) 2 units of Y per unit of X C) 3/2 units of Y per unit of X D) 1 unit of
Y per unit of X 14) In the table above, country B is producing 4 units of X and 6 units of Y. For
country B, the opportunity cost of producing an additional unit of Y is A) 1/2 unit of X per unit of Y
B) 2/3 unit of X per unit of Y C) 2 units of X per unit of Y D) 3 units of X per unit of Y 15) Country
A is producing 4 units of X and 8 units of Y; country B is producing 4 units of X and 6 units of Y.
Based on the table above, the opportunity cost of producing more of A) good X is lower in country
A B) good Y is lower in country A C) good X is the same for both countries D) good Y is the same
for both countries Production Possibilities Frontier Questions 16 to 18

Economics and True False
Question 2 (0.5/0.5)
Exhibit 2–4 Production possibilities curve data
| A | B | C | D | E | F | Capital goods | 150 | 140 | 120 | 90 | 50 | 0 | Consumer goods | 0 | 20 | 40 | 60 |
80 | 100 | | | | | | | |
In Exhibit 2–4, the concept of increasing opportunity costs is represented by the fact that:
a) Greater amounts of capital goods must be sacrificed to produce each additional unit of
consumption goods.
As shown in Exhibit 8–3, in order to maximise its profit, what price should GeneTech charge for it's
vaccine?
a) $35 per dose
A demand curve for the Steel Porcupines' concert tickets would show the:
a) Number of tickets that will be purchased ... Show more content on Helpwriting.net ...
This is evidence that price elasticity of demand for steak is: a) Unitary elastic
Question 30 (0.5/0.5)
The income elasticity of demand for shoes is estimated to be 1.5. We can conclude that shoes: a) Are
a normal good
Question 31 (0.5/0.5)
The price elasticity of demand for a vertical demand curve is: a) Perfectly inelastic
Question 32 (0.5/0.5)
To maximise its profit, a monopoly should choose a price where demand is: a) Elastic
Question 37 (0.5/0.5)

In Exhibit 7–3, when the price is $2, the profit–maximising (or loss–minimising) firm: a) Should
shut down and produce zero
Question 38 (0.5/0.5)
Which of the following is not a market failure? a) Prices determined in competitive markets, which
consumers, as individuals, have no control over.
Question 39 (0.5/0.5)
Suppose prices for a new home have risen, yet sales of new homes have also risen. We can conclude
that: a) The demand for new homes has risen
Question 40 (0.5/0.5)
Water is often provided to households by one supplier because: a) It is a natural monopoly
PRODUCTION POSSIBILITIES AND OPPORTUNITY COST CHAPTER 2 Which of the
following is NOT one of the three fundamental economic questions? | a. | What happens when you
add to or subtract from a current situation? | | | b. | For whom to produce? | | | c. | How to produce? | |
|

The Early Years Of The American Civil War
The study of the early years of the America republic has not received the same attention from
historians, as have many other periods of American history. In fact, only slavery and sectionalism,
the leading causes of the American Civil War, have been consistently covered in much of the
historical study of the first half of the nineteenth century. This became quite obvious with the
readings that I spent time with this semester. Many were somewhat long in the tooth, yet still
remained standard bearers for their topic, as further study has been sporadic or nearly nonexistent.
This seems especially true of the studies that attempt to bring together the various elements in a
manner that creates a big picture of the time period. Regional or social histories have dominated this
period in the last twenty years and perhaps it is time for a new attempt at integrating the various
pieces of the puzzle into a coherent picture. This is not to dismiss the people and groups that make
the story, but to put their story back into a greater context. The numerous books I read, when pieced
together, accomplish this to some degree, but this manner is incomplete, as it does not, nor were the
majority of the authors intending too, create a complete picture of what America was like in the
early nineteenth century. The first historian to attempt an overarching theme of the west was
Frederick Jackson Turner in his Significance of the Frontier in American History. For years, Turner's
vision was

Econ 101 In 20 Minutes: The Basics Of Economics
Econ 101 in 20 Minutes: The Basics of Economics
For many, economics seems like a field where people sit around studying boring charts and
developing statistics, In reality, economics is an exciting field of study that looks at how rational
human behavior impacts decision making. No matter how rich an economy is, there is always a
limited supply of resources. Economics looks at how these resources are distributed and created.
For example, there is only so much oil in the world that is produced every year. In a capitalist
society, the oil is distributed based on who is willing to pay the price. If the supply falls or demand
increases, the price will generally rise. As we saw over the last decade, there can be other factors
impacting oil use. When oil prices rise, the extra cost of a hybrid car becomes more appealing and
some ... Show more content on Helpwriting.net ...
For example, you can spend an hour studying or an hour playing piano. The opportunity cost of
your hour of piano playing is your hour of studying. Or, imagine going to the store. You can buy a
cup of coffee or a danish. You decide on the coffee. The opportunity cost of that coffee was the
danish. You were tired and needed to wake up, so you decided that the cup of coffee had a higher
value to you than the danish. In the future, you might make the opposite choice if you are hungry
and forgot to buy breakfast.
Each person's opportunity costs are decided by the individual's resources (income), wants, needs and
time. Countries make decisions on the same basis about how to allocate resource. In our last
example, the country that was producing lumber and coffee was making its decision to produce
more lumber based on the opportunity cost of lost coffee. If 50 pounds of coffee can be produced for
every truck full of lumber, then the opportunity cost of getting another truck full of lumber is 50
pounds of

Chapter 3—Scarcity, Trade-Offs and Economic Growth
Chapter 3–Scarcity, Trade–Offs and Economic Growth TRUE/FALSE 1. In a market economy,
government officials make most production decisions in a centralized manner. ANS: F PTS: 1 2.
Consumer sovereignty means that consumers vote with their dollars in a market economy, which
helps determine what is produced. ANS: T PTS: 1 3. In a market economy, prices help determine the
distribution of goods and services but not the allocation of resources. ANS: F PTS: 1 4. An increase
in production of one good will have zero opportunity cost only if the economy initially existed at a
point inside the production possibilities curve. ANS: T PTS: 1 5. Capital–intensive production
techniques tend to be utilized most commonly ... Show more content on Helpwriting.net ...
|both a. and b. above | ANS: E PTS: 1 2. A market economy answers the question "how" will goods
be produced by focusing on |a. |dollar votes. | |b. |consumer sovereignty. | |c. |least–cost method of
production. | |d. |who can afford these goods. | |e. |both a. and b. above | ANS: C PTS: 1 3. Which of
the following is not a question that scarcity forces all societies to answer? |a. |Which goods and
services are to be produced? | |b. |How are goods and services to be produced? | |c. |Who will get the
goods and services produced? | |d. |How can scarcity be

Basic Economic Concepts : Absolute And Comparative...
Basic Economic Concepts Absolute and Comparative Advantage Absolute Advantage is the
comparison of productivity of a person, company, or nation to another person, company, or nation
and the ability to produce with fewer inputs (what is used to make the product) than another
producer. Comparative Advantage is the opportunity costs (what must be given up to obtain an item)
between two producers and the ability to produce at lower opportunity costs than another producer.
Absolute Advantage can be found in both goods that are produced by an individual, company, or
nation, while Comparative Advantage is impossible to be found in both goods that are produced by
an individual, company, or nation. Although Absolute Advantage is important in international trade,
Comparative Advantage plays a larger part and is a key factor in international trade. N. George
Mankiw states, "The principle of comparative advantage states that each good should be produced
by the country that has the smaller opportunity cost of producing that good" (2014, p. 58). The
downfall is that some individuals may be worse off from international trade, while the country's
overall well–being is better off. Absolute and Comparative Advantage are a large part of
international trade, which can be beneficial to the economy as a whole. A company in one country
being able to use fewer inputs in productivity than another company in a different country is one of
the benefits of Absolute Advantage in international

What Is The Competitive Nature Of Productivity?
The competitive nature of global enterprise drives firms to produce high quality goods and services
and pushes them to offer these goods and services at a fair market value price. From time to time,
one concern that is overlooked is the long run growth of firms' production possibilities, which can
be driven by advancements in technology, investment in capital stock, and the daily projection of
human capital frontiers, to name a few (Stiroh). However, productivity, an amount of output per
hour of work, is a big contributor to firms' expansion (BLS). In 1998, American economist Paul
Krugman wrote, "Productivity isn't everything, but in the long run it is almost everything" (The Age
of Diminishing Expectations). Economists must recognize ... Show more content on Helpwriting.net
...
The more important aspect of the PPC, however, is the ability of the curve to shift outward. This
visual expansion represents something much more profound: true growth and effective
maximization of resources. A website from Professor Elizabeth Dunne Schmitt of the State
University of New York at Oswego models the difference between temporary growth versus
permanent growth by examining the PPC. She explains that moving from any point inside the PPC
to any point closer to or directly on the PPC itself represents temporary growth. She goes on to
show that permanent growth is characterized by an outward shift of the PPC as a whole. Dr. Schmitt
describes, "Only this type of growth produces lasting increases in output and living standards . . .
Productivity gains come from several sources: increase in human capital, increase in physical
capital, technological advances, and better use of resources." This source affirms that educating the
workforce, increasing investment spending on capital goods, developing better production
techniques, and improving management of existing resources will elicit more efficient "production
with . . . [an unchanged quantity of] resources."
My views concerning the growth of firms have changed after completing AP Macroeconomics.
Previously, I did not recognize that there are differences between short–term and long–term benefits.
I believed that there were many ways for a

Social Security Affect People's Incentive To Work
Luigi Vittatoe Professor Melvin Landry EEC2304 Introduction to Microeconomics January 13,
2015 Homework #1 Chapter 1 6a) How does the provision of Social Security affect people's
incentive to save while working? People don't worry about their future earnings and save since their
government provides for them and will save much less. 6b) How does the reduction in benefits
associated with higher earnings affect people's incentive to work past age 65? They will work less if
at all past 65 8a) Regulating cable TV prices shows the government's concern about efficiency. The
market failure involved is due to market power where small group of persons or a single person
unduly influences market prices. 8b) Providing vouchers to some poor people to ... Show more
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Scotland will still gain from trade because they have comparative advantage with an opportunity
cost of 40 scones which is less than the opportunity cost of 50 scones per sweater for England. 9a)
True. The gains from trade are dependent on the comparative advantages in production of goods.
Even if one country has the absolute advantage in the production of all goods and they achieve gains
from the trade. 9b) False. It is impossible for one person to have comparative advantage in
everything they do because the opportunity cost of production varies. 9c) True. If a certain trade is
good for one person it can't be good for the other because when one person has comparative
advantage in one good and the same as the opportunity cost. 9d) False. If trade is good for a country
it is not good for everyone in the country. It makes some individuals worse off through imports as it
makes the country as a whole better off. 9e) False. Trade makes optimum allocation of resources
based on opportunity cost and comparative advantage. Through trade customers will receive goods
or services at a lower price. The inefficient producer will have to exit the market so trade cannot be
good for

Unit 2 Assignment Analysis
Unit 2 Assignment Sonda Vaszlavik Kaplan University Online Prof. P. Tovbin August 12, 2013 Unit
2 Assignment Questions: 1. A representative of the American clothing industry recently made the
following statement: "Workers in Asia often work in sweatshop conditions earning only pennies an
hour. American workers are more productive and as a result earn higher wages. In order to preserve
the dignity of the American workplace, the government should enact legislation banning imports of
low–wage Asian clothing." Answer the following: a. Which parts of this quote are positive
statements? Which parts are normative statements? The parts of the quote that are positive
statements: Workers in Asia often work in sweatshop ... Show more content on Helpwriting.net ...
Asian taxes would rise to offset the lost revenue of monies from the factories that have shut down.
3. Atlantis is a small, isolated island in the South Atlantic. The inhabitants grow potatoes and catch
fresh fish. The accompanying table shows the maximum annual output combinations of potatoes
and fish that can be produced. Obviously, given their limited resources and available technology, as
they use more of their resources for potato production, there are fewer resources available for
catching fish. Maximum annual output options Quantity of potatoes Quantity of fish (pounds)
(pounds) A 1,000 0 B 800 300 C 600 500 D 400 600 E 200 650 F 0 675 a. Examine the Maximum
annual output options table above and the resulting Production Possibility Frontier Graph below and
answer parts b – f. Production Possibility Frontier Graph b. Can Atlantis produce 500 pounds of fish
and 800 pounds of potatoes? Explain. No. Atlantis cannot produce 500 pounds of fish and 800
pounds of potatoes because technology and resource constraint, we can only do it if we are allowed
to change our resources. c. What is the opportunity cost of increasing the annual output of potatoes
from 600 to 800 pounds? The opportunity cost of increasing the annual output of potatoes from 600
to 800 pounds is

How Will The Frontier Be Affected By A Positive Change?
Question One a. Why is the PPF concave to the origin? The production possibilities frontier is
concave to the origin as it represents the increase opportunity goods along with the outputs of goods
which is increasing. This is due to the law of opportunity goods – with one increase or production,
an increase in opportunity costs follows (Layton, Robinson and Tucker, 2016). b. How will the
frontier be affected by a positive change in technology for the product on the horizontal axis? The
points represented on the production possibilities frontier represent the maxim outputs of each
product (Layton, Robinson and Tucker, 2016. The amount of tables produced each year is presented
on the vertical axis's and the amount of chairs produced each ... Show more content on
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Elasticity is not confined to demand curves as the demand of a product consumed is not always
related to the price of the item. For instance the demand of meat products may be high during
holiday seasons, while the price is the same throughout the year and vice versa. b. The demand for a
product is price elastic and the product 's price is decreased by X%. What might be the expected
change in quantity demanded and revenue? If a product is price elastic and the price decrease this
will result in more people purchasing the product and therefor the revenue will increase. This is
because more people are going to purchase the product in higher quantities if they see it at a cheaper
price. For instance supermarkets often promote price dropped items, at a new cheaper price, this
means more people are likely to buy that brand of product as opposed another that is a higher price
– resulting in a higher revenue for the product (Layton, Robinson and Tucker, 2016). Question Four
a. Explain why profits are maximised when MR = MC. Profits are maximised when market revenue
= market cost because the amount of product being produced is equal to the cost of producing the
output. If marginal revenue was left then marginal cost, this would be the cost of producing the
output was less than the revenue, causing the profit to lower (Layton, Robinson and Tucker,

Essay Explain Why A Movement From A Point Inside A...
1) Must a rational choice always work out well? In other words, is it possible for someone to regret
a rational decision? –A rational choice is when you take the available resources and then use them to
the best way to achieve an objective. Therefore, when people are making rational choices they are
comparing the benefits and the cost of the choices. So they can receive the most net benefit from the
situation. However, it is possible for some to regret their decision that they have made. When
someone is making their rational decision it may seem like they made the best decision at the time.
However, a subsequent event may occurred, which would turn out to look like it has more benefits
compare to the original decision. 2) What are the two ... Show more content on Helpwriting.net ...
These items are things such as hammers, machines, and buildings. However, financial capital
enables people to provide business with financial resources, but they are not used to produce goods
and capital. Examples of finical capital are money, stocks, and bonds. 4) Explain why a movement
from a point inside a production possibilities frontier to the production possibilities frontier is
described as a free lunch and a movement along a production possibilities frontier is described as a
tradeoff. – When there is movement from a point inside of the Production possibilities frontier
(PPF) to the (PPF) this what is called a free lunch. A free lunch is something that has been given to
you, you didn't have to give up something to receive it. So when you're going to moving from the
inside of the (PPF) it by increasing production by using currently unused resources and by using
resources in their most productive way. These resources wouldn't cost you to use the so the point
moves to (PPF) because there was no tradeoff for the resources. Next, there is a tradeoff which is
when you have to give up something in order to get something else. So when there is a movement
along the (PPF), the point is moving due to the fact is giving up something to be able to produce
more of something

Comparative And Absolute Advantages: USAd Canada
Comparative and Absolute advantages: Comparative advantage is the ability to make or produce
something at a lower opportunity cost. Opportunity cost is something that we do every single day in
the way we live our lives. This is giving up something for something else. If you wanted to buy
some new sports gear for your man cave it may cost $100, but if you only make $50 a week. You
unfortunately would have to give up spending any of your money for two whole weeks to buy some
of this new swag. So you decide to give up chicken wings or a cold pint for your new gear. This is
my example of comparative and absolute advantages.
The attached scenario in our reading suggests the following: USA and Canada producing units of
potatoes and rice. The USA can produce eight units of ... Show more content on Helpwriting.net ...
The USA can produce eight units of potatoes or four units of rice or four potatoes and two units of
rice. Canada will have the absolute advantage because it can produce more of the items, sixteen
units of rice or ten units of potatoes or eight rice units and five units of potatoes. The comparative
advantage that would work well in the USA and Canada would be for the USA to produce the
potatoes and for Canada to produce the rice.
The production possibility frontier refers to a point at which an economy, most efficiently produces
its good and services, as a result of allocating its resources in the best way possible. (Heakal, 2014)
Economics is a simple science based on the assumptions that supply is limited while demand is
limitless. There is always a need to efficiently manage production to meet the ever increasing
demands. We will look at free trade and its basic concept. Free trade is a mutual understanding for a
one for one swap of goods. This doesn't always need to be one for one swap; the two

Bu204 Macroeconomics Unit 2 Assignment Essay
Renea Frymoyer BU204 01 September 29, 2012 Questions: 1. A representative of the American
clothing industry recently made the following statement: "Workers in Asia often work in sweatshop
conditions earning only pennies an hour. American workers are more productive and as a result earn
higher wages. In order to preserve the dignity of the American workplace, the government should
enact legislation banning imports of low–wage Asian clothing." Answer the following: a. Which
parts of this quote are positive statements? Which parts are normative statements? Positive
statements are "claims that attempt to describe the world as it is" (Mankiw, 2011, p. 31). Normative
statements are "claims that attempt to prescribe how the ... Show more content on Helpwriting.net ...
Answer the following: a. What would shoppers see when they shopped in Wal–Mart and the other
"big box" stores that sell so many imported items? If the government enacted a special tax on
imported clothing making the selling price equal to the selling price of clothing made in the United
States, shoppers would see imported items with much higher prices in discount stores. If the prices
of clothing made in sweatshops and in the United States were comparative, shoppers would consider
the trade–offs and opt to buy clothing made in the United States for higher quality, loyalty to United
States workers, and the health of our economy (Mankiw, 2011, p. 4). Wal–Mart and "big–box"
stores that sell so many imported clothing items would see a decrease in sales. Shoppers would
choose to buy clothing at stores that sell clothing made in the United States. These stores would see
an increase in sales. b. Would this tax policy have a better effect, worse effect, or no different effect
on American workers than the legislation banning the imports discussed in question 1? What kind of
effect would the tax have on the Asian workers? Trade between two countries can make each
country better off (Mankiw, 2011, p. 10). Third–world countries with sweatshops have a
comparative advantage in producing clothing at a lower opportunity cost (Mankiw,

Production Possibility Frontier ( Ppf ) Essay
1. Production Possibility Frontier (PPF) is a graph that shows the potential combinations of goods
that an economy is able to produce given available technology and factors of production.
 Its slope is negative, shape is concave or bowed, points inside are inefficient, a point on the PPF
are efficient and attainable, point above are unattainable and also require economic growth.
 Economic growth is achieved by increasing the economics' growth, ability to produce. 2.
Opportunity cost is the value of next best option. Giving up one thing to do something else.
 Parts of opportunity cost are explicit costly (money spent along the project to make it happen, for
the task to be done perfectly money and labor need to be involved, e.g. Boss paid workers for their
project, students pay tuition to enroll in class and all other amenities involved.) and implicit cost
(one's time value or origin in the next best alternative. The time incorporated in order to run out the
next best option).
3. Macroeconomics deals with large scale phenomena. Microeconomics deals with the options of
small economic unit.
 Microeconomics involves supply and demand in an individual market, individual consumer
behavior, and externalities arising from production and consumption; while, macroeconomics
involves monetary/fiscal policy, reason for inflation and unemployment, and international trade/
globalization.
 Microeconomics discusses topics like individual labor market, consumer behavior, and theory

Production Benefits Of America And Japan's Global Economy
In today's global economy, it makes sense for nations to benefit from producing those goods that
they specialize in, and consequently trade amongst each other the excess quantities. As a result,
consumers across the globe have access to vast varieties of products produced at the lowest costs.
However, when two nations' efficiencies are equivalent in the same product, one might think that
trading products between these nations is futile. Moreover, when one nation is better at producing
all items considered for trade, self–sufficiency might seem the obvious choice to the unwitting.
Here, we analyze trade between two nations, and reveal that trade benefits indeed exist when
exploiting specialization while considering opportunity costs. ... Show more content on
Helpwriting.net ...
To understand which nation has an advantage over the other concerning each products productivity,
we can identify which nation requires the least amount of time to produce each product. Mankiw
(2015) explains that the producer requiring fewer inputs holds absolute advantage. By reviewing the
production possibilities in Table 1, we can see that absolute advantage does not exist for producing
cars, since for each nation one worker takes 0.25 years to produce one car. However, America holds
absolute advantage for producing grain, because it only takes 0.1 years for one worker to produce
one ton of grain, as opposed to 0.2 years for Japan. While Japan might not hold absolute advantage
in our scenario, comparative advantage exists, and we go on to explain why. A producer holds
comparative advantage when their opportunity cost is lowest for one product, therefore gives up less
costs when not producing the other product (Mankiw, 2015); and comparative advantage drives
countries to produce product in which they specialize in (Boundless.com, 2017). As we review our
business scenario's opportunity costs in Table 2, we see that Japan has comparative advantage in
producing cars because its opportunity costs are lower than America – 1.25 tons of

Review for Midterm I
California State University –Fullerton Econ 201– Review for Midterm I Dr. El Hag– Spring 2010
Multiple Choice Identify the choice that best completes the statement or answers the question.
____1.The slope of a line that passes through the points (10, 15) and (20, 7) is a. | –5/4. | b. | –4/5. |
c. | 4/5. | d. | 5/4. | ____2.If Shawn can produce more donuts in one day than Sue can produce in one
day, then a. | Shawn has a comparative advantage in the production of donuts. | b. | Sue has a
comparative advantage in the production of donuts. | c. | Shawn has an absolute advantage in the
production of donuts. | d. | Sue has an absolute advantage in the ... Show more content on
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If Puneet must work 0.5 hour to make each purse, then his production possibilities frontier is based
on how many hours of work? a. | 2 hours | b. | 5 hours | c. | 20 hours | d. | 50 hours | Table 4–1 Price |
Aaron's Quantity Demanded | Angela's Quantity Demanded | Austin's Quantity Demanded | Alyssa's
Quantity Demanded | $0.00 | 20 | 16 | 4 | 8 | $0.50 | 18 | 12 | 6 | 6 | $1.00 | 14 | 10 | 2 | 5 | $1.50 | 12 | 8
| 0 | 4 | $2.00 | 6 | 6 | 0 | 2 | $2.50 | 0 | 4 | 0 | 0 | ____11.Refer to Table 4–1. If these are the only four
buyers in the market, then when the price increases from $1.00 to $1.50, the market quantity
demanded a. | decreases by 1.75 units. | b. | increases by 2 units. | c. | decreases by 7 units. | d. |
decreases by 24 units. | ____12.What will happen in the rice market now if buyers expect higher rice
prices in the near future? a. | The demand for rice will increase. | b. | The demand for rice will
decrease. | c. | The demand for rice will be unaffected. | d. | The supply of rice will increase. |
____13.If the price of a good is low, a. | firms would increase profit by increasing output. | b. | the
quantity supplied of the good could

Essay about Health Economics
MEMORANDUM
To: Professor Sherry Glied
From: Shraddha Kothari
Re: Using Grossman's model to evaluate how NYC's new sick leave law will affect emergency
room use
Date: February 10, 2015
This memorandum will use Grossman's model of production of health to evaluate how New York
City's new sick leave law will affect emergency room use.
Grossman's model states that a person utility is based on health (H) and other non–health related
goods (Z) that the person consumes. The production possibility frontier for Grossman model shows
the tradeoff between home good production (Z) and health (H). Unlike usual production possibility
frontiers, an individual needs an optimal level of H to maximize consumption of Z goods.
New York City's new sick ... Show more content on Helpwriting.net ...
The individual's health is a stock variable which changes over time. Hence, health decisions in one
period not only impact that period but also impact subsequent periods. With paid sick leave, it is
easier for an individual can take time off work to recuperate. This has multiple benefits. Firstly, it
allows the individual to recuperate before health levels become extremely low. Extremely low levels
of health will result in more ER visits and a longer recovery period. Secondly, if the individual has
an infectious disease then paid sick leave allows the individual to recover and it prevents the
infection from spreading to other people in the organization. Lastly, the improved health (due to
recuperation) will increase employee productivity in subsequent periods at work. Hence paid sick
leave will reduce ER visits over the course of the individual's life.
3) A study shows that availability of after–hours care by primary physicians reduces emergency
room visits. Based on this study we can infer that it is likely that some of these individuals are
forced to visit emergency rooms due the unavailability of after–hours care by primary physicians
and lack of paid sick leave to reach the primary care physician during regular work hours. Paid sick
leave will reduce the emergency room visits as employees can now contact their primary care
physicians during work hours.
4) With the new paid sick leave law, an

Assignment Questions On Economic Principles
Koo Weng Liang Written Assignment 1 (Microeconomics) for DB106 Economic Principles
Assignment Questions Question 1 A) An opportunity cost will arise when economists using between
alternative ways of allocating scarce resources. The opportunity cost is for economists to make
decision of the alternative use of scarce resources. By using production possibility frontiers (PPF)
can be illustrated the opportunity cost to result a clear simple way to effects of making economic
choice. A PPF is show the consumers goods and consumers services at the same time. B) Suppose
that the two goods that the country AMP produces Apples and Mobile phones. If the production
possibility frontiers (PPF) were a straight line, the additional of the unit of mobile phones required
to forgone the unit of apples. For example, to move to point A to point B (in order to produce 200
mobiles phones) 50 apples must be forgone. To move point b to point c (to gain another 200 mobile
phones), 125 apples must be forgone. As the country AMP sifts from Apples to Mobile Phones can
resulted the PPF becomes steeper and opportunity cost of the mobile phones increases. At point B
most are producing Apples, although that mobile phones are more suitable to build. At point D most
are producing mobile phones. Producing more mobile phones would cause a big drop in Apples
output. The PPF would be Bowed–Shaped if resources with varying opportunity costs. C) i) The
international migration can be economically beneficial

Using The Production Possibilities Frontiers For Women And...
Name: Instructors Name: Course: Date Due: Question 1 Using the production possibilities frontiers
for WOMEN and MEN provided below, explain which group has a comparative advantage over
which type of Goods. Men earn and continue to earn higher incomes than women and thus have a
comparative advantage over women. Women have a comparative advantage over men on Childcare
and can be justified by their specialization in household chores. Not only does the scientific
reasoning reinforce this sexual division of labor, women's low wages and the assumed comparative
advantage in child care is used to privilege their contribution to human capital. (Himmelweit,
Simonetti, & Trigg, 2001) What will keep each group from trying to overcharge the other for their
specialized product? Children are an important source of enjoyment for both groups and make a
couple specialize during a relationship and thus prevent each group from overcharging. (Parkman,
2000) What are some of the barriers to trade that might keep the two groups apart even if there are
mutually beneficial gains from exchange possible? Jobs Demand unexpected overtime and travel
and thus keep these two groups apart as rejecting jobs will make them worse off. NUMBER TWO
{60 points}. Suppose there is market for airfares to Caribbean Beach Vacation Destinations
(CBVDs). Consider the following list of factors which might influence the market for CBVDs: I. A
and F occur at the same time The increase in

The Market
The Market 1. Explain the concepts of Comparative and Absolute Advantage. Having absolute
advantage is the way to go; this is a win, win situation. For a country or company to have absolute
advantage is a dream made in heaven. It is like winning a million dollars at poker while betting only
five bucks. This is the perfect situation where the production of goods is being produced at a lower
cost, but with the same resources. Absolute Advantage can also be achieved by having a higher
productivity with fewer labor resources. Ten workers produce the same five high quality cars than
15 workers in an eight hour day; or 15 workers produce the same five high quality cars in four
hours. Comparative advantage is a little trickier. Here you have to do the math or analyze which
country or company has the best opportunity cost. In other words, in order for a country or company
to have a Comparative advantage, their production goods have to be produced at a lower
opportunity cost relative to another company or country. 2. In this case, which country should
produce potatoes? Why? When I took a look at the unit numbers of the USA and Canada, everything
looked very simple and self explanatory, with the USA producing potatoes and Canada rice.
However, this was not the case; when you calculate the Opportunity Cost for both of the countries,
the results were surprising. This is not what you would expect; in this case, Canada is the country
that will produce potatoes. In order to look

Assignment 1
Department of Economics, School of Business and Management American University of Sharjah
Principles of Macroeconomics Practice Assignment 1 (chapters 1 &2) Instructor: Dr. Javed Younas
Name: ___________________________________ AUS e–mail id: ________________ 1. Amira is
thinking about going to the movies tonight. A ticket costs $7 and she will have to cancel her baby–
sitting job that pays $30. The cost of seeing the movie is: a. $7 b. $30 c. $37 d. $37 minus the
benefit of seeing the movie. 2. Alaa received a four–year scholarship to attend a university that
covered tuition and fees, room and board, and books and supplies. As a result a. attending the
university for four years is costless for Alaa. b. Alaa has no incentive to work ... Show more content
on Helpwriting.net ...
you give up less to accomplish that task than do others. you have specialized in that task, while
others have not. 12. Suppose that a further increase in specialization allows a country to increase
total output by 10% but afterward it was discovered that work absenteeism increased by 30%. This
is likely an example of a. modern production. b. too much specialization. c. too little specialization.
d. inefficiencies caused by labor unions. Assume that Japan and Korea can switch between
producing cars and producing airplanes at a constant rate. Table 3 Hours Needed to Make 1 Car
Airplane 30 150 50 150 Quantity Produced in 2400 Hours Cars Airplanes 80 16 48 16 Japan Korea
13. Refer to Table 3. Suppose Japan decides to increase its production of cars by 45. What is the
opportunity cost of this decision? a. 9 airplanes b. 15 airplanes c. 135 airplanes d. 225 airplanes 14.
Refer to Table 3. Japan should specialize in the production of a. cars and import airplanes. b.
airplanes and import cars. c. both goods and import neither good. d. neither good and import both
goods. 15. You had to pay $600 (non–refundable) for your meal plan for Fall semester which gives
you up to150 meals. If you eat only 100 meals, your marginal cost for the 100th meal is a. $6 b. $4
c. $0.25 d. 0$ 16. Specialization based on lower opportunity cost and trade are closely linked to a. b.
c. d. absolute advantage. Gains and loss to the buyers. comparative advantage. shrinkage of the
economic

Economics
Tutorial 1 Questions (based on Textbook End–of–Chapter Questions)
Question 1
Refer to Q1.1 Chapter 2 (Page 118)
What do economists mean by opportunity cost? According to this definition, is there anything that
does not have an opportuntiy cost? Question 2
Refer to Q1.2 Chapter 1 (Page 78).
What is scarcity? Why is scarcity central to the study of economics?
Question 3
In a paper written by Bentley College economists Patricia M. Flynn and Micheal A. Quinn, the
authros state:
"We find evidence that Economics is a good choice of major for those aspiring to become a CEO
(Chief Executive Officer). When adjusting for size of the pool of graduates, ... Show more content
on Helpwriting.net ...
a. Why might firms that provide workers with health insurance pay a lower wage to obese workers
than to workers who are not obese? b. Is Bhattacharya and Bundorf's findings relevant to the
question of whether health insurance provides people with an incentive to become obese? Briefly
explain.
Based on Jay Bhattacharya and M. Kate Bundorf (2009), " The Incidence of the Health Care Costs
of Obesity," Journal of Health Economics, 28(3), pp. 649–58.
Question 6
Centrally planned economies have been less efficient than market economies.
a. Has this difference in efficiency happened by chance, or is there some underlying reason? b. If
market economies are more economically efficient than centrally planned economies, would there
ever be a reason to prefer having a centrally planned economy rather than a market economy?

Additional Questions for Home Practice
Question 7
Refer to Q1 and Q2 of Thinking Critically Chapter 2 (Page 117).
Question 8
Refer to Q1.7 of 2 (Page 118).
Suppose we can divide all the goods produced by an economy into 2 types: consumption goods and
capital goods. Capital goods such as machinery, equipment, and computers, are goods used to
produce other goods.
a. Use a production possibilities frontier graph to illustrate the trade–off to an economy between
producing consumption goods and producing capital goods. Is it likely that the production
possibilities

Persuasive Essay On Operations Production
Soon Robot workers could take control of the production side of a workplace. Today, I will be
talking to James Hackett, who is the CEO of Ford, as well as Brendan, a union representative that
will be arguing to keep the workers ford has now. We will discuss about the future of Ford's
production. I want to persuade him to move to a fully automated production process that will result
in many benefits for the company. Ford motors should move to fully automated manufacturing
plants, because it will save the company multitudes of money, the robots would be much more
efficient in production, and the cost of ford products would decrease. By moving to a fully
automated production method, ford will be able to save themselves a plethora of money. Ford will
no longer have to pay factory workers, saving the company endless amounts money. Ford has
multitudes of factories workers all making a certain salary or hourly wage, and every penny of this
expense will be eliminated. Although they will have to spend initial amounts of money on the robots
themselves, the money they will save in the long run will be well worth the initial investment. The
robot's production possibilities are exponentially better than a human worker. These robots can work
endless hours and produce things much faster than humans. According to one website, "They (robot
workers) can produce a greater quantity in a short amount of time" (Robot Works). This fact proves
the higher possibility of production and faster rate

Mid Term
1. Atlantis is a small, isolated island in the South Atlantic. The inhabitants grow potatoes and catch
fresh fish. The accompanying table shows the maximum annual output combinations of potatoes
and fish that can be produced. Obviously, given their limited resources and available technology, as
they use more of their resources for potato production, there are fewer resources available for
catching fish.
Maximum annual output options Quantity of potatoes Quantity of fish (pounds) (pounds)
A 1,000 0
B 800 300
C 600 500
D 400 600
E 200 650
F 0 675
a. Examine the Maximum annual output ... Show more content on Helpwriting.net ...
(Also see the diagram) Is there any involuntary unemployment at this wage? If so, how much?
Explain why. (5 points)
[pic]
b2. What if the minimum wage is set at €40,000? (Also see the diagram) Is there any involuntary
unemployment at this wage? If so, how much? Explain why. (5 points)
[pic]
c. Given your answer to part b and the information in the table, what do you think is the relationship
between the level of involuntary unemployment and the level of the minimum wage? Who benefits
from such a policy and who loses? What is the missed opportunity here? (20 points)
5. For the last 70 years the U.S. government has used price supports to provide income assistance to
American farmers. At times the government has used price floors, which it maintains by buying up
the surplus farm products. At other times, it has used target prices, a policy by which the
government gives the farmer an amount equal to the difference between the market price and the
target price for each unit sold. Consider the market for corn depicted in the accompanying figure.

Price of corn quantity of corn (bushels)
Per bushel demand supply
$5 800 1200
4
3 1000 1000
2
1 1200 800
0
a. If the government sets a price floor of $5 per bushel, what does that mean and how will it affect
supply and demand (illustrate on the supply and demand curve below)? How many bushels of corn
are produced by the

Opportunity Cost
Name–Agnibesh Mukherjee.
Class– PGDM(Finance), Sec– D.
Roll– PGDM12F004, Class Serial No– 4.
Economics Assignment– Opportunity Cost Lets start with a small introduction to the topic
Opportunity Cost. Opportunity cost is the cost of any activity measured in terms of the value of the
next best alternative forgone (that is not chosen). It is the sacrifice related to the second best choice
available to someone, or group, who has picked among several mutually exclusive choices. The
opportunity cost is also the "cost" (as a lost benefit) of the forgone products after making a choice.
Opportunity cost is a key concept in economics, and has been described as expressing "the basic
relationship between scarcity and choice". The ... Show more content on Helpwriting.net ...
Explicit costs are opportunity costs that involve direct monetary payment by producers. The
opportunity cost of the factors of production not already owned by a producer is the price that the
producer has to pay for them. For instance, a firm spends $100 on electrical power consumed, their
opportunity cost is $100. The firm has sacrificed $100, which could have been spent on other factors
of production. Now lets look at some real life examples from my life inorder to understand
Opportunity Costs better.
Opportunity Cost Examples that I myself have been across– I have only Rs 1000 to spend and I
have two choices, I can eat at a nice restaurant or buy a good cricket bat instead. I spend my Rs
1000 on buying the cricket bat, then the opportunity cost of that choice is the delicious meal I did
not choose and let go.
Opportunity Cost also works in regards to time. Eg– I only have two hours of free time. I could
either go to a movie or meet a friend of mine. I choose to spend my time at the movie, the
opportunity cost of this decision is the time I could have spent enjoying the company of my friend.
Here 's another example– When for the first time I decided to invest my saved money lying with
me.I had two options that I could do with the money I had. My first choice was either investing in
Mutual Funds or leave the money in a Savings Account that earns only 5% per year. I invested

Essay on International Trade Simulation
The purpose of this paper is to summarize the International Trade Simulation, explain the basic
concept of International Trade, emphasize the four key points from the reading assignments in the
simulation, and apply these concepts to my workplace.
Simulation Summary
In the International Trade simulation, you are the Trade Representative of a small country called
Rodamia. You are introduced to international trade––the theory of comparative advantage and the
impact of tariffs, quotas, and dumping on international trade (Applying International Trade
Concepts, 2003). In the first segment, it is your job to evaluate what products to produce within the
country and what products to import based on the Production Possibility Frontier (PPF). Due ...
Basic Concept of International Trade
According to Colander, "The reason two countries trade is that trade can make both countries better
off" (2004, p. 416). In economics, the theory of comparative advantage clarifies why it can be
advantageous for two countries to trade, even though one of them may be able to produce every
kind of item more cheaply than the other. What matters is not the absolute cost of production, but
instead, the ratio between how easily the two countries can produce different kinds of goods. The
basic idea of the principle of comparative advantage is that as long as the relative opportunity costs
of producing goods differ among countries, then there are potential gains from trade.
International trade affects the economy by increasing the Aggregate Demand (AD), and by
becoming a source of inputs for production. International trade based on the theory of comparative
advantage will improve efficiency in allocating resources, as well as allow businesses to reach
economies of scale – "the situation in which costs per unit of output fall as output increases",
consequently reaching competitive prices of international markets (Colander, 2004, p. 428). When
an economy involves itself in trade, under the right circumstances, it is able to shift the Production
Possibility Curve (PPC) curve outward, and achieve greater levels of output. This increase in
production can be achieved through the use of more resources

Questions On Business Economics And The Production...
ASSIGNMENT 2 BUSINESS ECONOMICS SUBMITTED TO: PRIYANTHA BANDARA
(LECTURER) KENT INSTITUTE OF TECHNOLOGY STUDENT NAME STUDENT ID
MANPREET SINGH K150361 DEVINDER SINGH K140882 EXECUTIVE SUMMARY The
report deals with issues that arise in the production possibilities frontier as a result of workers
moving from their domestic countries to foreign countries for better work opportunities. Major
focus of this report is on change in PPF curve due to emigration and how production is being
affected due to it. The main issues discussed in the report are how change in technology or resources
mediate PPF curve outward or inside and how environment is being affected by that. To understand
this, the report first show the curve of an economy ... Show more content on Helpwriting.net ...
In addition to this, moving from one country to another can also lead to this impact on PPF. Mark
Paterson, Tony Abbott and Julia Gillard have also given their views on PPF and how increase in
population can effect PPF. 1.2 Aims This report examines PPF curve with change in population of
country to find how and what shift can be seen in curve and how environment is being impacted by
that. 1.3 Scope The report only discuss about change in PPF curve due to immigration. It does not
discuss how the shift in curve can be brought back to its original place by making any changes to
conditions and how can this migration be prevented to boost the production of a country. 2.0 PPF
without Immigration Production possibility frontier Curve A Curve B CAPITAL GOODS Figure 1:
PPF without immigration Figure 1 clearly shows PPF of a country which has no immigration in
happening in it. It can either be position A or B depending on circumstances but A is its actual
position where all production work is stable whereas B is a scenario which can occur if there is
economic growth in a country which is

How Freely Operating Market System
Introduction
The purpose of writing this report is to describe how freely operating market system or pure market
determining the price based on demand and supply. This report also explains how the market
mechanism can help to ensure that scarce resources are allocated to where they are most wanted. In
order to discuss answer quite clearly, diagrams will be mentioned in this report.
Describe how prices are determined under a freely operating market system
A market can be clearly explained as a place where products can be purchased by buyers and sold
by sellers. This means that a market consists of consumers who create demand of the products,
producers who supply the products, and a space where both groups can meet together to make a
trade. According to Prof. R. Chapman, however; the meaning of market is defined as not necessarily
to a location but invariable to a commodity (goods and services) and the buyers and sellers who are
involved in a competition with one another (Chands, 2014). In terms of Economics, a market system
is divided in 3 categories, including mixed market system, command or planned market system and
free market.
A free market : It can be interpreted as an economy system where a government plays no role on the
types of business activities or ownership (Hill,nd). Price in a free market economy is simply
determined by demand and supply for a product or a commodity (Childs, 2013). Supply and demand
interact with two factors which

Is It Worth The Definition Of Opportunity Cost?
Opportunity cost is the concept that when a choice is made, other possible choices are lost (a self–
explanatory "cost of opportunity"). Opportunity cost is quotidian in that any choice has opportunity
cost (if it does not, it cannot really be said to be a choice). A student's decision to have private math
lessons has opportunity cost – due to this choice, the student will have to spend time, money, and
energy which could be used otherwise, resulting in less options because there are less resources.
This concept ties into scarcity (the fundamental 'economic problem' where there are infinite wants
and limited resources) because opportunity cost only exists due to a limitation in resources and high
amount options – nothing would be lost if there

BU204 02 Langhoff Melissa Unit2 Essay
Unit 2 Assignment Melissa Langhoff Bu204_02 Unit 2 Assignment 1. Explain the difference
between absolute advantage and comparative advantage. Which is more important in determining
trade between individuals or countries? Is it absolute advantage or comparative advantage? Why?
Absolute advantage is the ability to produce more than one product efficiently and at the lowest
cost. Comparative advantage is the ability to specialize in producing one product at the lowest cost.
Comparative advantage affects trade the most because with specializing in producing one product
the companies must trade to receive other products. Comparative advantage also considers the
opportunity of cost to produce one product verse the other. 2. Let us ... Show more content on
Helpwriting.net ...
Country A's Production Possibilities Frontier Country B's Production Possibilities Frontier A.
Assume that country A and country B decide to use half of the resources in the production of each
good. Indicate the points of the maximum output of each good on the graphs for each country as
point A under such resource use. Country A would produce 75 units of popcorn, and 125 units of
peanuts, whereas Country B would produce 150 units of popcorn and 50 units of peanuts by
reducing their resources in half. B. Assume the two countries choose autarky and do not trade. What
would be the total world production of popcorn and peanuts under the autarky? The total popcorn
production would be 225 units and the total peanuts would be 175 units. C. Assume that each
country decides to specialize in either popcorn or peanut based on its respective comparative
advantage. Under the specialization, what is the total production of popcorn and peanuts? With each
country specializing in either peanuts or popcorn the world totals will be 300 units of popcorn and
250 units of peanuts. D. Assume country A and B decide to trade 100 units of popcorn for 100 units
of peanuts, show on the graphs the gain each country receives from trade. Label these points on the
two graphs "B." Country A would gain 100 units of popcorn while trading 100 units of peanuts
which would leave them with 150 units of peanuts. Country B would also

Leisureland Research Paper
Leisureland
This paper explores the economic concepts of the production possibilities curve, opportunity cost,
and comparative advantage. The Western and Eastern regions of a fictitious nation called
"Leisureland" are used as the framework to examine these topics and answer five Unit #1
assignment questions at the end of the paper. Table 1 shows Leaisureland's monthly production
capacity to produce bicycles and/or bowling balls:
Table 1: Leisureland regional production capacity per month
Production Possibilities Curve
A production possibilities curve is an economics model that graphically displays the production
potential for a pair of goods. Different production combinations, such as those in Table 1 can be
plotted along an XY axis, beginning ... Show more content on Helpwriting.net ...
[(4) = (–200/50)] C) A flatter production possibility curve denotes lower opportunity costs. The
Western region has the comparative advantage to produce bowling balls. For each ball produced,
their opportunity cost is one–quarter (.25) of one bicycle, versus the Eastern region's opportunity
cost of four bicycles. The Eastern region has the comparative advantage to produce bicycles with
the opportunity cost of one–quarter (.25) of one bowling ball for each bike produced. This flatter
production possibility curve can be visualized by reversing the data used above in the Eastern region
table: D) If the Eastern region produced all 400 of the bicycles, the Western region could produce
400 bowling balls. If the Western region produced 100 bicycles, the Eastern region could produce
the remaining 300 bikes, plus 25 bowling balls.
E) All 400 of the bicycles could be produced in the Eastern region, or the Western region could
produce 100 bicycles, leaving the remaining 300 to be produced in the Eastern Region, or some
other combination where the Western region produces from one to 99 bicycles and the Eastern
region produces the

Applying Economics Using An Example Of Economic Problem...
Section A Question One: a) Define economics using an example of economic problem from your
own life. Economics is the social science concerned with the production and consumption of goods
and services and the analysis of the commercial activities of a society. Economic problem is to
match resources to the unlimited wants and needs. For example: if you have $10 to spend, and you
want to buy a book which costs $10 each and a pencil that costs $1 each. Now buying a book mean
the loss of the benefit that would have been gained from the 10 pencils. b) Outline the steps needed
to develop an economic model. Explain how models help in economic decision–making. An
Economic model is defined as a theoretical construct that represents economic processes through a
set of variables and a set of logical or quantitative relationships between the two. The steps needed
to develop an economic model are:– 1. Identify the problem 2. Identify stakeholders in the problem
3. Identify alternate strategies to solve problem 4. Identify resources to implement chosen strategy
5. Implement 6. Evaluate "what was accomplished" 7. Modify or Disseminate problem Models help
in decision–making as they focus to gain a better understanding of how things work, to observe
patterns, and to predict the results of stimuli. They help to simplify and abstract from observed data,
and also serve as a means of selection of data based on a paradigm of econometric study. b)
Construct a Production Possibility

BU204 02 Langhoff Melissa Unit3 Essay
Unit 3 Assignment
1) The table below indicates the total quantity supplied and demanded of flashlights at different
price levels.
Price
Quantity Demanded
Per Month
Quantity Supplied
Per Month
$5
6,000
10,000
$4
8,000
8,000
$3
10,000
6,000
$2
12,000
4,000
$1
14,000
2,000
a. Draw Supply and Demand Curves. b. What are the equilibrium price and the equilibrium
quantity? The equilibrium price is $4 and the equilibrium quantity is 8,000 flashlights.
c. Suppose the market price is $5. What problem would exist in the market? Does it lead to surplus
or shortage? How do you expect this problem will affect the price? Indicate this on the supply and
demand graphs. If the market price is $5 means that the consumers are demanding a smaller ...
Explain. It is not feasible for Atlantis to produce 500 pounds of fish and 800 pounds of potatoes.
This is because it is past the production possibility frontier. With the point being outside of the
frontier shows that it is not possible for the country whether due to resources or personal or labor.
b. Calculate the opportunity cost of increasing the annual output of potatoes from 800 to 1000
pounds. The opportunity cost for increasing the potatoes output to 1000 pounds for be not being

able to produce any fish.
c. Calculate the opportunity cost of increasing the annual output of potatoes from 400 to 600
pounds. The opportunity cost for increasing the potatoes output to 600 pounds would be only being
able to produce 500 pounds of fish. This would be a loss of 100 pounds of fish.
d. What is the difference between the answers to parts b and c? The difference between parts b and c
is that even though Atlantis is only changing the amount of potatoes that they produce by 200
pounds in each part the amount that fish goes down increases the more that the potatoes are
increased. Just by changing it from 600 pounds to 800 pounds Atlantis would lose 200 pounds of
fish. By increasing it then to the 1000 pounds would cause the decrease to 0 pounds of fish being
produced. These numbers are different because when producing more potatoes the number of fish
decreases by double the amount that it decreased by

Efficiency Gain of International Trade Essay
In evaluating the efficiency gain of international trade, we are concerned about the entire country or
community, and thus encounter a more complicated situation with several individuals making up the
entire country. Answer these questions (provide graphs if you want):
What is meant by the community indifference curve?
The community indifference curve shows the various combinations of two commodities which yield
the same level of satisfaction or utility to a community or nation. It is intended to represent the
preferences of a country as a whole and is a convenient tool for deriving quantities of trade in a
two–good model. The slope of a curve at any point gives the marginal rate of substitution or the
amount of a commodity which a ... Show more content on Helpwriting.net ...
The shape of the production possibility frontier (PPF) of a country depends on: (1) its factor
endowments and (2) the production functions of the various commodities. The plausible shapes of
the production possibility frontier include:
Linear
Suppose there are constant returns to scale in both industries and only one factor, then the
production possibility frontier is a straight line. If the opportunity cost is constant as production of
different goods is changing, then a linear PPF is produced.
Concave (towards origin)
Suppose there is diseconomies of scale or decreasing returns to scale. Under full utilization of
resources, the production possibility frontier is concave towards the origin. This shape is basically
due to the differences in optimal factor intensities between industries. If a country faces increasing
opportunity costs or marginal rate of transformation (MRT) in producing more units of a
commodity, then this is shown by a PPF that is concave. The country will produce where the MRT is
equal to the equilibrium relative commodity price.
Convex (towards origin)
Suppose there is economies of scale or increasing returns to scale. Under full utilization of
resources, the production possibility frontier is convex towards the origin. If there is increasing

returns to scale in either or both industries and there is one factor of production then the production
set is non–convex.

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