Homework #1

# Homework #1 - reduction of only 1,000 units of capital...

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Economics 101-01 Fall 2011 Homework #1 Due September 19, 2011 Student: Evelyn Tavares 1. a. b. The value of the Y intercept on this graph is 15,000. c. The table and curve are based on the following assumptions: Full employment Fixed resources Fixed technology Two goods (capital goods and consumer goods) d. A to B = -1/20 = - 0,05 B to C = -2/20 = - 0,1 C to D = -4/20 = - 0,2 D to E = -8/20 = - 0,4 e. Between B and C the cost of one more capital good is 10 units of consumer goods. f. Between B and C the cost of one more consumer good is 0.1 units of capital goods. g.Yes, because the cost of producing the first 20,000 units of consumer good would be a

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Unformatted text preview: reduction of only 1,000 units of capital goods, the next 20,000 would cost 2,000 units of capital goods. The last 20000 units (from 60,000 to 80,000) cost 8,000 units of capital goods. h. On the graph i. On the graph j. The firm could reach a point that is currently unattainable by increasing its source of supplies, improving its quality and quantity resources and also improve its technology resources. 2. a and b: c. d. 3. (i) Positive (ii) Normative 4. I could be reading a book and drinking hot cocoa, instead I chose to do this assignment, and this is my opportunity cost....
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Homework #1 - reduction of only 1,000 units of capital...

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