AssignmentV - ARE 201: Introduction to Agricultural &...

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Spring 2008 Assignment V (short answer questions from chapters 1, 3-5) 1) What is an opportunity cost? Give an example. 2) Discuss what is necessary to make rational decisions. Be sure to mention opportunity cost, marginal cost, and marginal benefit. 3) What is the difference between microeconomics and macroeconomics? 4) Draw a production possibilities frontier between beans and peas. Label the unattainable points, the attainable points with fully employed resources, and the attainable points with unemployed resources. 5) Before the first Gulf War, Kuwait had the capacity to produce a certain amount of oil from its oil wells. After the war, it found that capacity greatly diminished because the oil wells were on fire. Draw Kuwait's PPF before and after the war, assuming that the only two goods produced are oil and food. Further assume that setting the oil wells on fire did not affect Kuwait's ability to produce food. Explain why the PPF before the war is different from the PPF after the war. Production
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This test prep was uploaded on 04/08/2008 for the course ARE 201 taught by Professor Eryuruk during the Spring '08 term at N.C. State.

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AssignmentV - ARE 201: Introduction to Agricultural &...

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