Quiz 1 2009 - Quiz 1 Elements of Microeconomics Name...

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Quiz 1 Elements of Microeconomics Name: Section: 1) Jobs, Wozniak, and Wayne are the only workers at Apple, where they make desktops and laptops. The following table shows the productivity of each worker per hour (if they only made one product or the other): Worker Laptops Desktops Jobs 4 6 Wozniak 8 8 Wayne 4 2 a) Draw the production possibility frontier for Jobs. b) Draw the production possibility frontier for Apple as a whole. c) How much of each good will be produced by each worker if the prices are given as follows: P Lap = $1,200, P Desk = $1,000? Show the total of each good for Apple as whole on the graph above. What is the total revenue for the company? d) Draw the laptop supply curve for Apple. (If you need to make any assumptions state what they are.)
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2) There are 2 goods in the economy, oranges (O) and pineapples (P).
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Unformatted text preview: John is just as happy with 1 orange and 6 pineapples as he is with 3 oranges and 2 pineapples. a) Draw an indifference curve consistent with the information above. b) He’s given a choice: 1 orange and 6 pineapples or 2 oranges and 5 pineapples. Can you determine which bundle he would prefer? If so, explain. c) John’s income is $20 and the prices are as follows: P O = $2, P P = $4. Draw John’s budget constraint. d) Find two points on John’s demand for oranges. [The information given may not be quite enough to do this; if you need to assume something beyond what you were given, do so.] Draw a demand curve through these points. Use arrows to indicate what happens to the demand curve if John’s income goes up. Did you make any assumptions about the good?...
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