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Class Assignment 2.docx - Econ 201 Class Assignment 2...

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Econ 201Class Assignment 2Review1.Ahmed is considering buying a particular sweater. The price of the sweater is lowered by 20%.
2.According to economic theory, people will make decisions by weighing the additional costs andbenefits of small changes in their behavior. This is called:
3.People’s tendency to think about their choices and act in their own self-interest is called:
4.Company X can produce a hat for $4. Company Y can produce it for $6. Does company X have anabsolute advantage or a comparative advantage? Briefly explain your answer.New Questions begin on next page
5.Use the PPF below to answer the following questions.a.Find the output combinations:Bread (millions of loaves)CircusesXYAb.Which points on the graph are efficient?

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Term
Fall
Professor
Staff
Tags
Economics, Ahmed, price of the sweater

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