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Review for Test 1 - Economics 2010 Section I Questions for...

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Economics 2010 Section I Questions for Review 1. What would the PPF look like if there were decreasing opportunity costs 2. Distinguish between comparative advantage and absolute advantage. 3. What gives a person, firm or country a comparative advantage? Use the table below to answer questions 4-6. Output per unit of labor: Canada US Beer: 20 80 Milk: 40 120 4. In which good does Canada have a absolute advantage (if any)? 5. In which good does Canada have a comparative advantage? 6. What is Canada’s opportunity cost of beer? 7. Define demand (thoroughly). 8. List all of the influences on consumption choices that change demand. 9. Define supply (thoroughly). 10. a. Table #1 is the demand schedule for Bob and Sue. It tells us how many CD's Bob and Sue will purchase (each month) at different possible prices. In the table, figure out the market demand curve. Graph it labeling all the axes. Table #1 Sample Demand Schedule for Bob and Sue P Q d(Bob) Q d(Sue) Q D(Market) 5 4 6 10 3 5 15 2 4 20 1 3 b. Table #2 is the supply schedule for ACME and AJAX, two companies that produce CDs. It tells us
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