hw1 handout - Eco 2301.003 Principles of Macroeconomics...

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Eco 2301.003 Principles of Macroeconomics Spring 2008. Assignment # 1 Due: February 4, 2008 by 2:15pm (Put your answers on a separate sheet.) Note: It is ok to work together on the assignments. However, you must turn in your own work. Turning in a photo copy of someone else’s work or just copying their work is a violation of the university’s policy on academic dishonesty. I. The table below shows the endpoints of the ppfs for two countries and two goods. So, for example, if Japan puts all of its resources into cars, it can produce 24 cars. On the other hand, if it puts all of its resources into jets, it can produce 6. USA Japan Cars 20 24 Jets 8 6 1. Draw the ppfs for each country. Assume constant opportunity costs. 2. What is the opportunity cost of producing one jet for USA? For Japan what is the opportunity cost of producing one car? 3. USA wants to produce at least two jets. What is opportunity cost for Japan if it wants to produce twice as many cars as USA in this scenario?
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