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Unformatted text preview: Eco 1 Spring 2008 Problem set 1 1 This problem set is due Week 2 at the start of your recitation (Tuesday, January 22 nd or Thursday, January 24 th ). Please review the textbook’s relevant sections – particular the Solved Problems – prior to attempting Problem Set questions. You’ll be surprised at how much better you perform. 1) Draw a Production Possibilities Frontier (PPF) of soybeans and cotton. Following this, show what effect a drought would be expected to have on the initial PPF. Also, show what effect a new technology that allowed soybeans yields to double (that is, twice as many soybeans can be grown for the same cost) would have on the initial PPF. 2) The following PPF of a country producing Capital and Consumption goods shows the following trade- off and points of production/resource allocation. a. Which point(s) is(are) not feasible points of production? b. Which point(s) is(are) efficient?...
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- Spring '04
- Economics terminology, Production-possibility frontier, Cabernet Sauvignon, capital goods