Roderick_April_Unit_2_Homework_BU204-05 - the US however;...

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Chapter 2: April Roderick Problem 1 (a). (b). No it is not feasible, because it id outside the PPF. (c).The opportunity cost would be 200 fish. (d).The opportunity cost would be 50 fish. (e).C and D are not the same, because the opportunity cost is they would have to give up more fish to produce more potatoes. This implies that PPF curve shows that they are better at producing potatoes than fishing. The reason being is that at their farthest point of producing potatoes they have to quit fishing, even at point B it would cost them nearly half of their fish production.
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Problem 3 (a). No, Peter Pundit is not correct because, even though EU could surpass us in industry production, there is still the comparative advantage, meaning that even if the EU has an absolute advantage, there will still be mutual gains from trading with the US. UK is saying they would produce everything and not need trade with
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Unformatted text preview: the US however; they can not specialize in all things or they will lose in the production, because they can not produce everything and same with the US. Problem 10 I do think that it is easier to build an economic model that accurately reflects events that have already occurred than to build an economic model to forecast future events. It implies that there are too many changing factors of data that would change the outcome of the model. Problem 11 I think it is important for the public to be able to differentiate normative statements from positive statements in these recommendations, so that the public will understand the difference between a prescription and prediction, to understand how it will affect them by facts and what could affect them....
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This note was uploaded on 08/05/2008 for the course BU 204-05 taught by Professor Hill during the Spring '08 term at Kaplan University.

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Roderick_April_Unit_2_Homework_BU204-05 - the US however;...

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