problemset_ch02 - PROBLEM SET FOR CHAPTER 2 The Economic...

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PROBLEM SET FOR CHAPTER 2 The Economic Problem: Scarcity and Choice 1) Suppose you must divide your time between studying your economics final and writing a final paper for your English class. The fraction of time you spend studying math and its relation to your grade in the two classes as follows: Fraction of Time Spent on Economics Economics Grade English Grade 0 0 97 20 45 92 40 65 85 60 75 70 80 82 50 100 88 0 a) Draw a tradeoff curve for the economics grade versus the English grade. b) What is the opportunity cost of increasing the time spent on economics from 80 to 100 percent? What is the opportunity cost of increasing the time spent on economis from 60 to 80 percent? c) Are there increasing opportunity costs from spending more time on economics? Explain. d) What can you do to get a 92 in both subjects? Explain. 2) On one acre land, John can produce 20 bushels of corn or 15 bushels of wheat. On the same amount of land Tom can produce 10 bushels of corn or 12 bushels of wheat. Who has an absolute advantage in corn production? In wheat production? Who has a comparative advantage in corn production? In wheat production? 3)
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This note was uploaded on 12/03/2009 for the course INDUSTRIAL IE 307 taught by Professor Arzuakyüz during the Spring '09 term at Atılım Üniversitesi.

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problemset_ch02 - PROBLEM SET FOR CHAPTER 2 The Economic...

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