Economics 102
Spring 2006
Answers to Homework #1
1.
Substitute x = 4 into y = ½ x1.
This shows y=1 so the desired line passes through
(4,1).
Similarly, using the second equation, the line passes through (6,4).
So the slope of
our line is
∆y/∆x = 3/2
The yintercept, b, can be found by entering a point into the equation y = 3/2 x +b
1 = (3/2)*4 + b
b = 5
So the solution is y = 3/2 x – 5
2. a. positive
b. positive
c. normative
3.
Glock should specialize in guns because their opportunity cost of producing guns is
less than the Crock’s opportunity cost of producing guns. Glock has a comparative
advantage in producing guns.
Similarly, the country of Crock should specialize in butter
since they have a comparative advantage in producing butter.
4.
a. 5, 1/5
b. 4, ¼
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 Spring '08
 Drozd
 Economics, Macroeconomics, Comparative Advantage, Glock, Crock

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