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Unformatted text preview: Economics 202 Homework Assignment # 1 Instructions: Please write your answers in the space provided for each question. Answers to short essays should be concise and to the point. If necessary, use a separate piece of paper for your computations. Make sure to turn in all your work and DO NOT change the format of the file. 1. Describe how the standard of living, the cost of living, and unemployment vary over the business cycle. In an expansion the standard of living __________in a recession it___________ In an expansion the cost of living _____________in a recession it ____________ In an expansion unemployment _____________in a recession it ___________ 2. Identify the following items as consumption good, capital/investment good, or factor of production. a. A computer __________ b. An automobile __________ c. A printer__________ d. A farm worker _________ 3. Tom can produce either 10 kites and 6 jigsaw puzzles an hour or 6 kites and 8 jigsaw puzzles an hour. Tessa can produce either 12 kites and 4 jigsaw puzzles an hour or 4 kites and 10 jigsaw puzzles and hour. a. Calculate Toms opportunity cost of a kite__________ b. Calculate Tessas opportunity cost of a kite__________ c. Who has a comparative advantage in producing kites?__________ d. Who has a comparative advantage in jigsaw puzzles?_________ e. If Tom and Tessa specialize in producing the good in which they enjoy a comparative advantage, what are the quantities of jigsaw puzzles and kites produced? Jigsaw puzzles_________ Kites_________ 4. The table below shows the demand and supply schedules for mouse pads...
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- Winter '08