Problem Set 1-1 M.A

Problem Set 1-1 M.A - CIA4U: ANALYZING CURRENT ECONOMIC...

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CIA4U: A NALYZING C URRENT E CONOMIC I SSUES P ROBLEM  S ET  #1-1 P RODUCTION  P OSSIBILITIES , O PPORTUNITY  C OST ARGINAL  T HINKING 1. List the three basic questions that every economic system must  answer. Whom to produce for, what to produce, how to produce 2. Which of these three questions does the production possibilities  curve help answer? How to produce 3. How   would   a   large   earthquake   affect   a   country’s   production  possibilities curve? An earthquake will reduce the capital and consumer goods consumed.  Consumers will not be able to get the goods due to loss in transportation  services and communication therefore consumer goods will decrease. And  as workers will not be able to come to work, thus capital goods will  decrease  too.  Therefore  the  curve  will   move  to  the  left  and  become  smaller and narrower. 4. The cost of a master’s degree in engineering equals the tuition plus 
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This note was uploaded on 09/29/2010 for the course BBA ISOM111 taught by Professor Hu during the Spring '08 term at HKUST.

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Problem Set 1-1 M.A - CIA4U: ANALYZING CURRENT ECONOMIC...

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