110_11s_HW1_Solution-1

110_11s_HW1_Solution-1 - ECON 110, Spring 2011, L1 & L3...

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HW1 Solution Q1 (Chapter 1A Q9) Use the figure A1.16 to calculate the slope of the relationship. a. At points A and B . b. Across the arc AB . The slope at point A is - 4, and the slope at point B is - 1. (Ref: To calculate the slope at a point on a curved line, draw the tangent to the line at the point. Then find a second point on the tangent and calculate the slope of the tangent. The tangent at point A cuts the x -axis at 2.5. The slope of the tangent equals the change in y divided by the change in x . The change in y equals 6 (6 - 0) and the change in x equals - 1.5 (1 - 2.5). The slope at point A is 6/ - 1.5, which equals - 4. Similarly, the slope at point B is - 1. The tangent at point B cuts the y - axis at 5. The change in y equals 3, and the change in x equals - 3. The slope at point B is - 1.) The slope across the arc AB is - 2. The slope across an arc AB equals the change in y , which is 4 (6 minus 2) divided by the change in x , which equals - 2 (1 minus 3). The slope across the arc AB equals 4/ - 2, which is - 2. Q2 (Chapter 2, Q12) Suppose that Yucatan’s production possibilities are given in the table. a. Draw a graph of Yucatan’s PPF and explain how your graph illustrates a tradeoff. Yucatan’s PPF is illustrated in Figure 2.11. The figure illustrates a tradeoff because moving along Yucatan’s PPF producing more of one good requires producing less of the other good. Yucatan trades off more production of one good for less production of the other. b.
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110_11s_HW1_Solution-1 - ECON 110, Spring 2011, L1 & L3...

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