lab 2 - University of Lethbridge Department of Economics ECON 1012 Introduction to Macroeconomics Lab Instructor Michael G Lanyi Lab 2 Chapter 2 The

lab 2 - University of Lethbridge Department of Economics...

This preview shows page 1 - 3 out of 4 pages.

Page 1 University of Lethbridge Department of Economics ECON 1012 Introduction to Macroeconomics Lab Instructor: Michael G. Lanyi Lab # 2 Chapter # 2 –– The Economic Organization of Society Answer Key 1. D Response: The negative slope of the production possibility curve implies that one can get better grades in English only by sacrificing better grades in math. 2. B Response: A production possibility table tells what combinations of goods can be produced, not what combination is best. 3. B Response: The opportunity cost is what must be given up. In this case, to reduce unemployment from 8 to 4%, inflation must rise from 4 to 10%. The change in the inflation rate is the opportunity cost of lowering unemployment. 4. D Response: The opportunity cost of increasing current consumption increases as current consumption rises. The opportunity cost of increasing consumption from 750 to 800 is 160 future consumption units but the opportunity cost of increasing current consumption from 550 to 600 is only 20 future consumption units. 5. A Response: Producing an extra 45 Umies means not producing 30 (40-10) Ums. 6. B Response: Producing an extra 40 roses means not producing 31 (109-78) carnations. 7. C Response: Graph each point and find out that the graph of the table is a straight line or realize that the opportunity cost of 10 Rye is always 2 eggs. Constant opportunity costs are represented by a straight-line production possibility curve. 8. B Response: This is the only curve along which opportunity cost is constant and equal to 0.8 turkeys per chicken. 9. E Response: From this graph we can tell that with the given inputs, the following combinations are possible [eggs, rye]: (20, 0), (15, 10), (10, 10), (5, 30) and (0, 40).
Image of page 1
Page 2 10. A Response: Finishing 2 more math problems means not finishing 1 (4-3) economics problems. 11. A Response: Moving from point B to A means giving up 4 articles for 8 CDS. Thus, the opportunity cost is 4/8 or 1 2 .
Image of page 2
Image of page 3

You've reached the end of your free preview.

Want to read all 4 pages?

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes
A+ icon
Ask Expert Tutors