ECON_4_-_Exam_1_-_G_SA_Key_all_versions

ECON_4_-_Exam_1_-_G_SA_Key_all_versions - 'PART II Graphs...

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Unformatted text preview: 'PART II Graphs and Short Answer Write your answer or draw your graph neatly in the space provided. Make sure you address all parts of the question. Points vary and are indicated in each question. 1. Draw a production possibilities frontier for these two goods: hot wings and chili. Suppose that production of these goods is subject to constant marginal opportunity costs and be sure that your graph reflects this fact. Now suppose that a new and innovative technology enhances the production of hot wings, but does not affect the production of chili. Show how this innovation changes the ppf. (5 pts.} \tck 'w'. ’3 LLJI ‘ Ctfi’l'E/wt axig (i: (I: "HA (5 (“oil (J cu r (1 UL“) CZ) W (?> E: tv: diuretic-m of Mai WM35 O chili 2. Clearly draw and label a 885D graph for one-day ski lift tickets at Tussey Mountain. Show the market in equilibrium at $25. Now suppose that entrepreneurial PSU alums open a competing ski slope on Mount Nittany. How does this affect the graph you drew for lift tickets at Tussey Mountain? Clearly identify and label any relevant changes in your original graph. (6 pts.) -‘ - Eu“ -\' w I wath S (Turin »\(tbefi ~P£Q ZS r" f p. m Mir. e A w ‘. m an m (2) Sh w | afiwhbdwu . Ima Ronga was discussing the market for cocoa beans with her friend the chocolate maker, Choco Latte. Ima said “Ever since Venezuela announced that its cocoa harvest was likely to be the lowest ever in fifteen years, the price of coca beans has been rising and rising and people are buying more and more. I think the demand for cocoa beans mu st be upward sloping.” Is Ima right? Briefly explain why or why not. (5 pts.) . Horatio and Gibbs are neighbors. They are both capable of solving crimes and making wooden boats. The chart below shows the maximum number of boats and solved crimes each could produce in a given month. Fill in the appropriate cells in the chart to indicate the opportunity cost of each activity for each person (be sure to include the units!) and answer the question below. (6 pts.) Max Opp Cost of Crime Solved Opp Cost of (L 6A, ~Gr.’ (15rd at “A ‘iL‘c-t'ir Based on the principle of comparative advantage, who should specialize in solving crimes? \ aw _/ c rW‘ 3. Ima Ronga was discussing the market for cocoa beans with her friend the chocolate maker, Choco Latte. Ima said “Ever since Venezuela announced that its cocoa harvest was was likely to be the lowest ever in fifteen years, the price of coca beans has been rising and rising and people are buying more and more. I think the demand for cocoa beans must be upward sloping.” Is Irna right? Briefly explain why or why not. (3 pts.) 1U) is wrfl, 3431 became ‘liw Pis MWMM Purim owe, ‘ - w u‘l WWW b SAW); 91::in flaw V MM wtva . m MW ((7% My Adi/(WT; 5MP V b Marts flat, (I); Q; 155% aim/um. I A”, (—L—flf—f—ffir/ {/{ngiw-L-ul )[if’t'de‘Z fl I, q . ‘ I - 1’ WI 93-5 " Yg-Fliz/MU .. ;.. L "tr-A. [mm it a * t x I, 4. Clearly draw and label a 385D graph that shows the State College market for pizza in equilibrium at $10 per pie. Suppose that the Borough of State College levies a tax on the producers of pizza, which effectively increases the cost of producing pizzas. Clearly show how this change is reflected in your graph. (8 pts.) (jaw! (' Wi‘lfiii‘e ’ (Jakamwru‘l wit-(WU) a 3/me 3 é, ( PC {7 Ga 29C I (Z) «— S gar-{twat m. | " 61 "’7 iltjimlr P/ Sim-Aug}! Q ‘ PART II Graphs and Short Answer Write your answer or draw your graph neatly in the space provided. Make sure you address all parts of the question. Points vary and are indicated in each question. 1. Clearly draw and label a 885D grap Rene—day ski lift tickets at ’I‘ussey Mountain. Show the market in equilibrium t $18, Now suppose that entrepreneurial PSU alums open a competing ski slope o ount Nittany. How does this affect the graph you drew for lift tickets at Tussey Mountain? Clearly identify and label any relevant changes in your original graph. (6 pts.) 2. Columbo and Gibbs are neighbors. They are both capable of solving crimes and making wooden boats. The chart below shows the maximum number of boats and solved crimes each could produce in a given month. Fill in the appropriate cells in the chart to indicate the opportunity cost of each activity for each person (be sure to include the units!) and answer the question below. (6 pts.) - Max Opp Cost of Opp Cost of Crime Solved Based on the principle of comparative advantage, who should specialize in solving crimes? Céiumbo 3. Draw a production possibilities frontier for these two go ds: pizza and soup. Suppose that production of these goods is subject t "increasing arginal opportunity costs and be sure that your graph reflects this fact. @374 supp se that a new and innovative technology enhances the production of pizz 7513?; does not affect the production of soup. Show how this innovation changes the ppf. l5 pts.) ( Cfiwlgmafa/ 0 Sam? 4. Ima Ronga was discussing the market for cocoa beans with her friend the chocolate maker, Choco Latte. Ima said “Ever since Venezuela announced that its cocoa harvest was likely to be the lowest ever in fifteen years, the price of coca beans has been rising and rising and people are buying more and more. I think the demand for cocoa beans must be upward sloping.” Is Ima right? Briefly explain why or why not. {5 pts.) PART II Graphs and Short Answer Write your answer or draw your graph neatly in the space provided. Make sure you address all parts of the question. Points vary and are indicated in each question. 1. Matlock and Horatio are neighbors. They are both capable of solving crimes and making wooden boats. The chart below shows the maximum number of boats and solved crimes each could produce in a given month. Fill in the appropriate cells in the chart to indicate the opportunity cost of each activity for each person (be sure to include the units!) and answer the question below. (6 pts.) - Max Opp Cost of Opp Cost of Crime Solved Boat Based on the principle of comparative advantage, who should specialize in solving crimes? M at late; 2. Draw a production possibilities frontier for these two goods: motor homes and boats. Suppose that production of these goods is subject to constant marginal opportunity costs and be sure that your graph reflects this fact. Now’ suppose that a new and innovative technology enhances the production of boats, but does not affect the production of motor homes. Show how this innovation (changes the ppf. (5 pts.) Sign} [lid 0 Show the market in equilibrium t $30. 4 Now suppose that entrepreneurial PSU alums open a competing ski slope on Mo ittany. How does this affect the graph you drew for lift tickets at 'I‘ussey Mountain? Clearly identify and label any relevant changes in your original graph. [6 pts.) 3. Clearly draw and label a 885D grmone—day ski lift tickets at Tussey Mountain. 4. Ima Ronga was discussing the market for cocoa beans with her friend the chocolate maker, Choco Latte. Ima said “Ever since Venezuela announced that its cocoa harvest was likely to be the lowest ever in fifteen years, the price of coca beans has been rising and rising and people are buying more and more. I think the demand for cocoa beans must be upward sloping.” Is Ima right? Briefly explain why or why not. (5 pts.) ...
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This note was uploaded on 09/09/2009 for the course ECON 004 taught by Professor Graf,pauledwin during the Spring '07 term at Penn State.

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ECON_4_-_Exam_1_-_G_SA_Key_all_versions - 'PART II Graphs...

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