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    ECON 100 Assignment 1

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    tahmeem
    This document provides the instructions for Economics Assignment 1. It includes 7 questions covering topics from the first chapter of the economics textbook such as opportunity costs, production possibilities frontiers, absolute and comparative advantage in trade, and the relationship between supply, demand, and price. Students are asked to answer the questions in short, succinct responses and submit their handwritten work by the due date and time.

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    ECON 100 Assignment 1

    Uploaded by

    tahmeem
    114 views3 pages
    This document provides the instructions for Economics Assignment 1. It includes 7 questions covering topics from the first chapter of the economics textbook such as opportunity costs, production possibilities frontiers, absolute and comparative advantage in trade, and the relationship between supply, demand, and price. Students are asked to answer the questions in short, succinct responses and submit their handwritten work by the due date and time.

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    practice question ECON 100 ]

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    ECON+100+Assignment+1

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    This document provides the instructions for Economics Assignment 1. It includes 7 questions covering topics from the first chapter of the economics textbook such as opportunity costs, production possibilities frontiers, absolute and comparative advantage in trade, and the relationship between supply, demand, and price. Students are asked to answer the questions in short, succinct responses and submit their handwritten work by the due date and time.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    114 views3 pages

    ECON 100 Assignment 1

    Uploaded by

    tahmeem
    This document provides the instructions for Economics Assignment 1. It includes 7 questions covering topics from the first chapter of the economics textbook such as opportunity costs, production possibilities frontiers, absolute and comparative advantage in trade, and the relationship between supply, demand, and price. Students are asked to answer the questions in short, succinct responses and submit their handwritten work by the due date and time.

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    ECON 100: Principles of Economics Assignment 1

    Due: Monday, September 30, 2019

    Time: 1:00 pm

    Instructions: All assignments must be handwritten. The assignment is to be submitted in the blue
    box in the econ wing. Be sure to write your name and roll number on all submitted material. Give
    short, succinct answers. Brevity is your friend (especially in the exams where you’ll be
    constrained for time).

    Question 1 (3 marks)

    You were planning to spend Saturday working at your part-time job, but a friend asks you to go
    skiing. What is the true cost of going skiing? Now suppose you had been planning to spend the
    day studying at the library. What is the cost of going skiing in this case? Briefly explain.

    Question 2 (4 marks)

    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.

    a. regulating cable TV prices


    b. providing some poor people with vouchers that can be used to buy food
    c. breaking up Standard Oil (which once owned 90 percent of all oil refineries) into several
    smaller companies
    d. imposing higher personal income tax rates on people with higher incomes

    Question 3 (3 marks)

    The first principle of economics discussed in Chapter 1 is that people face trade-offs. Use a
    production possibilities frontier to illustrate society’s trade-off between two “goods”—a clean
    environment and the quantity of industrial output. What do you suppose determines the shape and
    position of the frontier? Show what happens to the frontier if engineers develop a new way of
    producing electricity that emits fewer pollutants.
    Question 4 (5 marks)

    Classify each of the following statements as positive or normative. Explain.

    a. Society faces a short-run trade-off between inflation and unemployment.


    b. A reduction in the rate of money growth will reduce the rate of inflation.
    c. The Federal Reserve should reduce the rate of money growth.
    d. Society ought to require welfare recipients to look for jobs.
    e. Lower tax rates encourage more work and more saving.

    Question 5 (10 marks)

    American and Japanese workers can each produce 4 cars a year. An American worker can produce
    10 tons of grain a year, whereas a Japanese worker can produce 5 tons of grain a year. To keep
    things simple, assume that each country has 100 million workers.

    a. For this situation, construct a table analogous to the table in Figure 1 from the book
    (Mankiw, 7th ed).
    b. Graph the production possibilities frontiers for the American and Japanese economies.
    c. For the United States, what is the opportunity cost of a car? Of grain? For Japan, what is
    the opportunity cost of a car? Of grain? Put this information in a table analogous to Table
    1 from the book.
    d. Which country has an absolute advantage in producing cars? In producing grain?
    e. Which country has a comparative advantage in producing cars? In producing grain?
    f. Without trade, half of each country’s workers produce cars and half produce grain. What
    quantities of cars and grain does each country produce?
    g. Starting from a position without trade, give an example in which trade makes each country
    better off.

    Question 6 (4 marks)

    Using supply-and-demand diagrams, show the effect of the following events on the market for
    sweatshirts.

    a. A hurricane in South Carolina damages the cotton crop.


    b. The price of leather jackets falls.
    c. All colleges require morning exercise in appropriate attire.
    d. New knitting machines are invented.

    Question 7 (6 marks)

    Cups of coffee and donuts are complements. Both have inelastic demand. A hurricane destroys
    half the coffee bean crop. Use appropriately labeled diagrams to answer the following questions.
    a. What happens to the price of coffee beans?
    b. What happens to the price of a cup of coffee?
    c. What happens to the price of donuts?

    END

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