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101hwk1 - a You debate using a Saturday afternoon to(1 nap...

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Name:_________________________ ECO 101 830 Principles of Microeconomics Homework #1, due Monday, 2/15 1. (6 points) Suppose an economy produces only two goods: oranges and sweaters. The production possibilities curve is graphed below. a) Consider the four points labeled on the diagram. Describe each point in terms of its attainability (is it possible?) and desirability (is it efficient?). b) Is there one “best” point for the economy to produce at this time ? c) On the graph above , show how economic growth will affect production possibilities. 2. (6 points) Describe how the concepts of scarcity, choice, and opportunity cost apply to each of the following situations. Think about: what is the scarce resource? what is the choice to be made? what is the opportunity cost of the choice?
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Unformatted text preview: a) You debate using a Saturday afternoon to (1) nap or (2) work on this assignment. b) The Oswego County legislature, facing a large budget deficit, debates over whether to (1) increase property taxes 35% or (2) increase property taxes only 15% and lay off 100 county workers 3. (4 points) Looking at data on married households, economists find that husbands whose wives work earn less on average than husbands whose wives are not in the labor force. I then conclude that I should quit my job to boost my husbands earnings. Describe what is wrong with my economic analysis. 4. (4 points) Explain whether each of the following statements is positive or normative. a) ExxonMobil posted record profits in the 4th quarter of 2006. b) Oil Company profits are too high. 2...
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