1 If a
country has a choice between two products (hats and computers) and two
production combinations like A and B
Combination
|
Hats
|
Computers
|
A
|
0
|
1,000
|
B
|
200
|
900
|
If the country goes from a production combination
like A to production combination B, then what will be the
opportunity cost? Show your work
2
Where would a country want to produce on the production
possibility curve (PPC for the country)? Inside of it? Outside of it? On the
Curve? Why? How will a country make that decision where they want to be? Be
specific with your answer
3 Given the following production possibilities
for the two countries, identify the comparative advantage, absolute
advantage for clocks and cars by the the two countries Who buys cars
and who sells the cars in this question? show work here
Production per day
|
Italy
|
Sweden
|
Cars
|
600
|
800
|
Clocks
|
2,000
|
1,000
|
4
True or False and explainwhy:
An Equilibirum at the grocery store is when all the shelves are fully
of products
5 Agree or Disagree and
why: If the demand increases for a product like laptops and there is no
change in the supply of laptops at the same time, then using SUPPLY and DEMAND
CURVES, the new equilibrium price might go up or stay the same, or be lowered
6 Define opportunity cost
What is the opportunity cost to you of attending college? What was your
opportunity cost of doing this test today?
7 Why is trade making both the
buyer and the seller better-off? How would a buyer decide that they are
better-off with the trade? What will a buyer compare the price they pay
to? Are both parties equally better-off?
8 If there is a new breakthrough
in manufacturing technology that reduces the cost of producing Cellphones by
half, what will happen the following Four parts of supply and demand: (1)
supply of cellphones, (2) demand for cellphones, (3) price and sale (quantity
sold) of cellphones, (4) demand for Cellphones Apps You must explain in full
detail what happens in both the market for cellphones and Cellphone Apps
Explain why it is happening, for full credit Use terms like shifts in
demand left or right or supply shifts to explain
9 True or False and why? All
market eventually come to equilibrium and they really happen in real
life? Will they come to equilibrium at the same time for all
markets – like for bread, cars, baseball games, and vegetables
10
One
tradeoff society faces is between efficiency and equity Define each term If
the US government redistributes income from the rich to the poor, explain how
this action affects equity as well as efficiency in the economy