answerstohomework1spring2006

answerstohomework1spring2006 - Economics 102 Spring 2006...

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Economics 102 Spring 2006 Answers to Homework #1 1. Substitute x = 4 into y = ½ x-1. 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 y-intercept, 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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This note was uploaded on 08/08/2008 for the course ECON 102 taught by Professor Drozd during the Spring '08 term at Wisconsin.

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answerstohomework1spring2006 - Economics 102 Spring 2006...

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