PS1_1

# PS1_1 - Rice University ECON 211 Fall 2009 Problem Set...

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Rice University ECON 211, Fall 2009 Problem Set 1 (100 points) Due on Friday, Sept. 4 KEEP YOUR WORK NEAT. MAKE IT EASIER FOR THE GRADERS! (Please type your answers whenever possible. Thanks.) 1. ( 20 pts. ) You are trying to decide whether to go skiing for the weekend. The cost of skiing: transportation, lift tickets, and accommodation for the weekend costs \$300. However, your host will feed you so you will spend no money on food. However, if you go skiing you will lose \$120 (after tax) for one weekend day that you will miss work. However, if you work that weekend, you will have to eat out at a restaurant and this will costs you \$30. What is the opportunity cost of going skiing? Write down the cost measured in money. 2. ( 24 pts. ) Tom is stranded on a desert island and can either sh or harvest dates. f Six points on his production possibilities frontier are given in table below. Dates gathered Fish caught A 54 0 B 50 1 C 42 2 D 32 3 E 20 4 F 0 5 a) Plot these possibilities on a “Dates gathered/Fish caught” grid, label the points, and draw the PPF. (Put Dates gathered on the vertical axis).

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PS1_1 - Rice University ECON 211 Fall 2009 Problem Set...

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