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ToshaCollins_BU204-16_Unit2 Assignment

ToshaCollins_BU204-16_Unit2 Assignment - expensive Because...

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Tosha Collins BU204-16 Unit 2 Assignment 5/1/10 1. A) 1000 800 600 400 200 0 0 100 200 300 400 500 600 700 800 0 200 400 600 800 1000 1200 Quantity of Potatoes Quantity of Fish 1000 800 600 400 200 0 A B C D E F B) Because the point lies outside of the curve and the output level exceeds the capacity for an efficient economy, it is not possible to produce 500 lbs of fish and 800 lbs of potatoes. C) The opportunity cost is 200, if you increase potatoes from 600 to 800 and decrease fish from 500 to 300. D) The opportunity cost is 50 due to the opportunity cost increasing the annual output of potatoes from 200 to 400 is the trade off of decreasing the annual output of fish from 650 to 600 E) Because as more products are produced, more of the other product has to be given up. 3.
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A) Peter Pundit is incorrect. Because of the increasing productivity in the EU, their prices will get cheaper. The excess amount of goods will make US goods more
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Unformatted text preview: expensive. Because of this, the US will be able to purchase goods from the EU for less. B) If the EU and the US continue to trade, EU goods will be cheaper to sell than the US goods and the US goods will cost more money. 10. True. Past events are easier to predict because you can create a model that shows the outcome. This information allows you to plot out the actual numbers on a graph to show both the demand and production curve. This implies that economists use the past to forecast the future. 11. Positive statements state whether or not something is true or false. Normative statements state an opinion about something in the world. It is important to know the difference between the two so that we know what is an opinion and what is a true statement....
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