Economics Survivor Assignment Paper
Economics Survivor Assignment
Shadman Kaif & Tony Ng
Q: What is your basic economic problem? (Be specific)
A: There is a water shortage (which is a need) on a deserted island. Of our fellow residents, 38 of them are people under the age of 18. This population is not very productive and they are inexperienced. They can be considered as our burden.
2) Q: Classify your existing resources as natural, capital and human. A:
Examples
Natural
Wild animals, fruit, trees, fish, food + water for one week
Human
Residents
Capital
Caves, axe, medical, flare gun
3) Q: Provide an example that illustrates how opportunity cost may exist on your island.
A: The opportunity cost of going to the other island to obtain water is that you sacrifice time for getting food.
4) Q: Assume that the economist on your island recommends that you adopt a mixed economic system. Pick one aspect of a command …show more content…
economy and one aspect of a market economy that you will adopt on your island. Justify your selections. A: Command Economy - allocate the food and water together and distribute it to everyone. This way, everyone has food and water. This way, the government (the collective leaders) create a small central economic plan. The goal is to use the natural resources in the most efficient way for the collective well-being. Market Economy - create a system in which everyone is sent to gather food and water. When they return, they shall be taxed on half of their earnings and that tax shall be redistributed to the incapable population (38 people under 18). They are able to keep the other half for themselves; this is an incentive for the residents to collect more food and water.
5) Q: With specific reference to your island, answer the following 3 basic economic questions: A: What to produce? Fish as food.
How to produce? Obtain by catching them with weapons (sticks) carved from wood, and bare hands. The flare gun would fire wood and this would help roast the fresh fish.
For whom to produce? The fellow residents.
6) Q: Choose two items that your island will produce (ex// coconuts and fish).
Create a production possibilities frontier to illustrate your productive capacity. A: The two items that our island will produce are fish for food and edible animals.
7) Q: Next, give two examples of how your island may increase production of both goods (ie. Shift its PPF outwards). Show the effect of this on your graph in #6. [3] A: One way that may increase production of both goods would be technological advancement. Specifically, we may add stone tips to our hunting sticks to create spears, which would increase the chance of catching and killing fish or edible animals. Another way to increase production would be the implementation of bait such as worms or insects. Resource production growth would increase correspondingly with the increased rate of finding and catching prey.
8) Q: Why is the PPF you drew in #6 a curved line instead of a straight line? Be sure to reference the specific products produced in #6.
[3] A: The PPF is a curved line because output is maximized as you get closer and closer to the centre of the x-axis, creating a curved shape. This is because the centre is the point where all the resources are being used at maximum efficiency, assuming that equal resources are devoted to both products. To clarify, assuming half the islanders are better at fishing and the other half are better at hunting, output is maximized when everyone is put into their most skilled job.
9) Q: Voluntary trade between two parties only occurs when there is mutual benefit involved. In other words, the cost of what is given up is less than the benefit of what is gained. Prove that trade between your island and hippie island can be mutually beneficial. Use a specific example. [2] A: By trading with the hippie island, both parties benefit because they both give away surplus resources that they do not need in exchange for scarce resources that they do need. To elaborate, our island may trade edible animals, a need that the hippie island lacks, in exchange for water, which is something that we need but lack. As this example illustrates, trade with the hippie island is beneficial as it can satisfy both of our unmet needs at the cost of resources that are not needed..
10) Q: Sustainable development refers to the resource use that meets the needs of the current generations without compromising the ability of future generations to meet their own needs. Give two examples of sustainable practices that you will adopt on your island. (2) A: One example of a sustainable practice would be to change diet when a population is noticeably declining. For example, if fish populations dwindle, we will eat more edible animals, assuming that they are in good supply. If neither are in good supply, we may change our diet to eat more fruit and other sources. The second way to have sustainable development would be to reduce resource consumption. Such may include, a policy of not wasting food and also a constantly-adjusted quota of fish and edible animals that cannot be surpassed and is commensurate to decreases in resource supply. We could also farm the wild animals in order to preserve their lives for future generations.
Shadman Kaif & Tony Ng
Q: What is your basic economic problem? (Be specific)
A: There is a water shortage (which is a need) on a deserted island. Of our fellow residents, 38 of them are people under the age of 18. This population is not very productive and they are inexperienced. They can be considered as our burden.
2) Q: Classify your existing resources as natural, capital and human. A:
Examples
Natural
Wild animals, fruit, trees, fish, food + water for one week
Human
Residents
Capital
Caves, axe, medical, flare gun
3) Q: Provide an example that illustrates how opportunity cost may exist on your island.
A: The opportunity cost of going to the other island to obtain water is that you sacrifice time for getting food.
4) Q: Assume that the economist on your island recommends that you adopt a mixed economic system. Pick one aspect of a command …show more content…
economy and one aspect of a market economy that you will adopt on your island. Justify your selections. A: Command Economy - allocate the food and water together and distribute it to everyone. This way, everyone has food and water. This way, the government (the collective leaders) create a small central economic plan. The goal is to use the natural resources in the most efficient way for the collective well-being. Market Economy - create a system in which everyone is sent to gather food and water. When they return, they shall be taxed on half of their earnings and that tax shall be redistributed to the incapable population (38 people under 18). They are able to keep the other half for themselves; this is an incentive for the residents to collect more food and water.
5) Q: With specific reference to your island, answer the following 3 basic economic questions: A: What to produce? Fish as food.
How to produce? Obtain by catching them with weapons (sticks) carved from wood, and bare hands. The flare gun would fire wood and this would help roast the fresh fish.
For whom to produce? The fellow residents.
6) Q: Choose two items that your island will produce (ex// coconuts and fish).
Create a production possibilities frontier to illustrate your productive capacity. A: The two items that our island will produce are fish for food and edible animals.
7) Q: Next, give two examples of how your island may increase production of both goods (ie. Shift its PPF outwards). Show the effect of this on your graph in #6. [3] A: One way that may increase production of both goods would be technological advancement. Specifically, we may add stone tips to our hunting sticks to create spears, which would increase the chance of catching and killing fish or edible animals. Another way to increase production would be the implementation of bait such as worms or insects. Resource production growth would increase correspondingly with the increased rate of finding and catching prey.
8) Q: Why is the PPF you drew in #6 a curved line instead of a straight line? Be sure to reference the specific products produced in #6.
[3] A: The PPF is a curved line because output is maximized as you get closer and closer to the centre of the x-axis, creating a curved shape. This is because the centre is the point where all the resources are being used at maximum efficiency, assuming that equal resources are devoted to both products. To clarify, assuming half the islanders are better at fishing and the other half are better at hunting, output is maximized when everyone is put into their most skilled job.
9) Q: Voluntary trade between two parties only occurs when there is mutual benefit involved. In other words, the cost of what is given up is less than the benefit of what is gained. Prove that trade between your island and hippie island can be mutually beneficial. Use a specific example. [2] A: By trading with the hippie island, both parties benefit because they both give away surplus resources that they do not need in exchange for scarce resources that they do need. To elaborate, our island may trade edible animals, a need that the hippie island lacks, in exchange for water, which is something that we need but lack. As this example illustrates, trade with the hippie island is beneficial as it can satisfy both of our unmet needs at the cost of resources that are not needed..
10) Q: Sustainable development refers to the resource use that meets the needs of the current generations without compromising the ability of future generations to meet their own needs. Give two examples of sustainable practices that you will adopt on your island. (2) A: One example of a sustainable practice would be to change diet when a population is noticeably declining. For example, if fish populations dwindle, we will eat more edible animals, assuming that they are in good supply. If neither are in good supply, we may change our diet to eat more fruit and other sources. The second way to have sustainable development would be to reduce resource consumption. Such may include, a policy of not wasting food and also a constantly-adjusted quota of fish and edible animals that cannot be surpassed and is commensurate to decreases in resource supply. We could also farm the wild animals in order to preserve their lives for future generations.