7.You are in charge of allocating residents to your dormitory’s baseball and basketball teams. You are down to the last four people, two of whom must be allocated to base-ball and two to basketball. The accompanying table gives each person’s batting aver-age and free-throw average. a.Explain how you would use the concept of comparative advantage to allocate the players. Begin by establishing each player’s opportunity cost of free throws in terms of batting average.b.Why is it likely that the other basketball players will be unhappy about this arrangement but the other baseball players will be satisfied? Nonetheless, why would an economist say that this is an efficient way to allocate players for your dormitory’s sports teams? . 8.The inhabitants of the fictional economy of Atlantis use money in the form of cowry shells. Draw a circular-flow diagram showing households and firms. Firms produce potatoes and fish, and households buy potatoes and fish. Households also provide the land and labor to firms. Identify where in the flows of cowry shells or physical things (goods and services, or resources) each of the following impacts would occur. Describe how this impact spreads around the circle.a.A devastating hurricane floods many of the potato fields.b.A very productive fishing season yields a very large number of fish caught.c.The inhabitants of Atlantis discover Shakira and spend several days a month at dancing festivals.
You've reached the end of your free preview.
Want to read all 12 pages?