Econ 201 Homework
Econ 201 Homework
1. ?
2. Jack has the absolute advantage in picking apples and berries.
The opportunity cost of picking one unit of apples for Jack is (8/15)
The opportunity cost of picking one unit of berries for Jack is (4/5)
The opportunity cost of picking one unit of apples for Jill is (15/8)
The opportunity cost of picking one unit of berries for Jill is (5/4)
If Jack and Jill were allowed to trade Jack would specialize in the picking of the berries.
3. Opportunity Cost is illustrated in the PPF graph by displaying the highest valued alternative that must be given up to engage in an activity. In this graph it illustrates the increasing opportunity cost to produce pizza and soda.
4. a) If consumer incomes fall than the demand is affected. Demand shifts to the left.
b) If the price of televisions increases than the demand for satellite dishes is decreasing. The demand curve shifts to the left.
c) The supply curve is increasing due to the new technology to produce satellite dishes. The supply curve shifts to the right.
d) The demand curve and supply curve are affected. Since the price of satellite dishes are expected to increase in the future, more consumers are willing to buy now than in the future. The demand curve is increasing while the supply curve is decreasing. The demand curve shifts to the right while the supply curve shift to the left.
e) The demand curve is decreasing due to the price of satellites increasing. The demand curve shifts to the left.
1. ?
2. Jack has the absolute advantage in picking apples and berries.
The opportunity cost of picking one unit of apples for Jack is (8/15)
The opportunity cost of picking one unit of berries for Jack is (4/5)
The opportunity cost of picking one unit of apples for Jill is (15/8)
The opportunity cost of picking one unit of berries for Jill is (5/4)
If Jack and Jill were allowed to trade Jack would specialize in the picking of the berries.
3. Opportunity Cost is illustrated in the PPF graph by displaying the highest valued alternative that must be given up to engage in an activity. In this graph it illustrates the increasing opportunity cost to produce pizza and soda.
4. a) If consumer incomes fall than the demand is affected. Demand shifts to the left.
b) If the price of televisions increases than the demand for satellite dishes is decreasing. The demand curve shifts to the left.
c) The supply curve is increasing due to the new technology to produce satellite dishes. The supply curve shifts to the right.
d) The demand curve and supply curve are affected. Since the price of satellite dishes are expected to increase in the future, more consumers are willing to buy now than in the future. The demand curve is increasing while the supply curve is decreasing. The demand curve shifts to the right while the supply curve shift to the left.
e) The demand curve is decreasing due to the price of satellites increasing. The demand curve shifts to the left.