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    This document contains a group assignment for an introductory economics course for engineers. It includes 7 questions about production possibilities curves, opportunity costs, profit maximization, elasticity, costs, and supply. Students must complete the assignment in groups of up to 5 members and submit a handwritten copy by the due date. Late assignments will not be accepted.

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    Assignment

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    111 views2 pages
    This document contains a group assignment for an introductory economics course for engineers. It includes 7 questions about production possibilities curves, opportunity costs, profit maximization, elasticity, costs, and supply. Students must complete the assignment in groups of up to 5 members and submit a handwritten copy by the due date. Late assignments will not be accepted.

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    This document contains a group assignment for an introductory economics course for engineers. It includes 7 questions about production possibilities curves, opportunity costs, profit maximization, elasticity, costs, and supply. Students must complete the assignment in groups of up to 5 members and submit a handwritten copy by the due date. Late assignments will not be accepted.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    111 views2 pages

    Assignment

    Uploaded by

    de_stansza
    This document contains a group assignment for an introductory economics course for engineers. It includes 7 questions about production possibilities curves, opportunity costs, profit maximization, elasticity, costs, and supply. Students must complete the assignment in groups of up to 5 members and submit a handwritten copy by the due date. Late assignments will not be accepted.

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    © All Rights Reserved
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    1

    INTRODUCTORY ECONOMICS FOR ENGINEERING


    ECON 1550
    Group Assignment

    Group Members: Max 5 students/Group


    Submission Date: 28th April, 2015; Class Time

    Submission Rules:
    1. Handwritten assignment
    2. A4 size white paper with cover page
    3. Equal participation in writing answers
    4. For those who do not belong to any group,
    they are required to do this assignment
    individually

    Note: Late submission will not be entertained!

    Question 1:
    The production possibilities curve below shows the hypothetical relationship between the production of guns
    (national defense) and butter (social goods) in an economy.

    (a)
    (b)
    (c)
    (d)

    Combination

    Guns

    Butter

    A
    B
    C
    D
    E

    0
    14
    26
    36
    44

    4
    3
    2
    1
    0

    What is the marginal opportunity cost of producing the second unit of butter?
    What is the total opportunity cost of producing the second unit of butter?
    What is the marginal opportunity cost of producing the third unit of butter?
    What is the total opportunity cost of producing the third unit of butter?

    Question 2:
    A production possibilities table for two products, grain and airplanes, is found below. Usual assumptions
    regarding production possibilities are implied. Grain is measured in metric tons and airplanes are measured
    in units of 1,000.

    Combination

    Grain
    (metric tons)

    Airplanes
    (1,000s)

    A
    B
    C
    D
    E
    F
    G
    H

    0
    14
    26
    36
    44
    50
    54
    56

    7
    6
    5
    4
    3
    2
    1
    0

    (a) Using the below graph construct a production possibilities curve from this information placing grain on
    the vertical axis and airplanes on the horizontal axis.
    (b) What is the opportunity cost of producing the first unit of airplanes? The marginal opportunity cost of
    producing the fourth unit of airplanes?

    2
    Question 3:
    A firm has the choice between producing product A, B, or C. In producing the products the firm faces a weekly
    cost of $10 for product A, $130 for product B and $200 for product C. The prices received for each product
    at different quantities are listed in the table below.

    Output

    Product A

    Product B

    Product C

    Profit A

    Profit B

    Profit C

    $3.00

    $15.00

    $35.00

    _____

    _____

    _____

    10

    2.00

    12.00

    20.00

    _____

    _____

    _____

    15

    1.25

    9.00

    10.00

    _____

    _____

    _____

    (a) Compute the firms profit for A, B, and C and enter this data into the table.
    (b) Which product will the firm choose to produce and how much output will maximize profit?

    Question 4:
    Based on the determinants of elasticity, explain what the price elasticity of demand of the following products
    would be: (a) ballpoint pens; (b) Crest toothpaste; (c) diamond rings; (d) sugar; and (e) refrigerators.

    Question 5:
    Assume a single firm in a purely competitive industry has variable costs as indicated in the following table in
    column 2. Complete the table and answer the questions.

    (1)
    Total
    product
    0

    (2)
    Total
    var. cost
    $

    (3)
    Total
    cost

    (4)
    AFC

    (5)
    AVC

    (6)

    (7)

    ATC

    MC

    $ 40

    $_____

    $_____

    $_____

    55

    _____

    _____

    _____

    _____

    $_____

    75

    _____

    _____

    _____

    _____

    _____

    90

    _____

    _____

    _____

    _____

    _____

    110

    _____

    _____

    _____

    _____

    _____

    135

    _____

    _____

    _____

    _____

    _____

    170

    _____

    _____

    _____

    _____

    _____

    220

    _____

    _____

    _____

    _____

    _____

    290

    _____

    _____

    _____

    _____

    _____

    (a) At a product price of $52, will this firm produce in the short run? Explain. What will its profit or loss
    be?
    (b) At a product price of $28, will this firm produce in the short run? Explain. What will its profit or loss
    be?
    (c) At a product price of $22, will this firm produce in the short run? Explain. What will its profit or loss
    be?

    Question 6:
    (a) The long-run industry supply curve in a constant-cost industry graphs as a horizontal line. Explain.
    (b) What is the relationship between the long-run supply curve in a constant-cost industry and elasticity?

    Question 7:
    What is GST? Explain the phenomena of imposing GST in Malaysia.
    2

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