The problem set is attached. Thank you!

Apr 26, | Economics

The problem set is attached. Thank you!

Problem Set I
Name & Section: ____________________________
Note: Academic researchers have shown the strong link between writing information by hand and
memory retention. I strongly advise students to complete this by hand. Please take the time to make
sure your writing is legible.
1. Introduction to Economics
A) Define (in your own words, please do not use the book, or other online resources) and give a
strong, unique, example for the following terms. Answers will be checked for originality.
Economics:
______________________________________________
_____________________________________________________
_____________________________________________________
exports: ________________________________________________
_____________________________________________________
_____________________________________________________
imports: ________________________________________________
_____________________________________________________
_____________________________________________________
__________________________________________
_____________________________________________________
_____________________________________________________
macroeconomics:
microeconomics: ___________________________________________
_____________________________________________________
_____________________________________________________
model: _________________________________________________
_____________________________________________________
_____________________________________________________
scarcity: ________________________________________________
_____________________________________________________
_____________________________________________________
2. Production Possibilities Frontier
A) Define (in your own words, please do not use the book, or other online resources) and give a
strong, unique, example for the following terms. Answers will be checked for originality.
________________________________
_____________________________________________________
_____________________________________________________
Allocative vs Productive efficiency:
comparative vs. absolute advantage: ________________________________
_____________________________________________________
_____________________________________________________
invisible hand: ____________________________________________
_____________________________________________________
_____________________________________________________
marginal analysis: __________________________________________
_____________________________________________________
_____________________________________________________
opportunity cost: ___________________________________________
_____________________________________________________
_____________________________________________________
positive & normative statements: __________________________________
_____________________________________________________
_____________________________________________________
production possibilities frontier: __________________________________
_____________________________________________________
_____________________________________________________
productive efficiency: ________________________________________
_____________________________________________________
_____________________________________________________
B) Comparative Advantage
1. Country A has 100 workers and Country B has 100 workers. Every worker in Country A can
produce 6 tons of wheat per year, or can produce 12 tons of corn per year. Every worker in Country B
can produce 2 tons of wheat per year, or can produce 10 tons of corn per year.
a. Which country has an absolute advantage in wheat?
_____________
b. Which country has an absolute advantage in corn?
_____________
c. Which country has a comparative advantage in wheat?
_____________
d. Which country has a comparative advantage in corn?
_____________
Suppose initially the countries do not trade and Country A has 50 workers producing corn and 50
producing wheat. Country B has 30 workers producing corn and 70 producing wheat.
Fill out the following table:
Country A
Country B
Corn Produced
Wheat Produced
Now the two countries trade with one another.
e. What good does Country A specialize in?
f. What good does Country B specialize in?
_____________
_____________
If these countries have all workers produce the product that their country has a comparative
advantage in, how much do they produce?
Country A
Country B
Corn Produced
Wheat Produced
g. How much more of each good is produced in total with specialization than when there was no
trade? Corn:
___________ Wheat: ___________
h. Now suppose Country B improves its technology to produce wheat, and now each worker can
produce 4 tons of wheat per year. Are the gains from trade between Country A and Country B higher
or lower than before? Why?
_____________________________________________________
_____________________________________________________
_____________________________________________________
2. Suppose that Happy Land produces only two goods—food and suntan oil. Its production
possibilities are:
Food (pounds per month)
Suntan oil (gallons per month)
300
0
200
50
100
100
0
150
Active Land also produces only food and suntan oil, and its production possibilities are:
Food (pounds per month)
150
100
50
0
Suntan oil (gallons per month)
0
100
200
300
Draw the two PPFs
a. What are the opportunity costs of food and suntan oil in Happy Land? _____________
_____________
What are the opportunity costs of food and suntan oil in Active Land? _____________
b. Why are the opportunity costs the same at each output level?
c.
d. If each nation specialized where they have a comparative advantage, and then traded, find the
acceptable ranges for trade.
1 pound of food would have to trade between which values of suntan oil? ___________
1 pound of suntan oil would have to trade between which values of food? ___________
e. If each nation produces where they have a comparative advantage, and the terms of trade are 50
pounds of food for 75 gallons of suntan oil, how much will each nation profit by, compared to
producing both good themselves? Happy Land__________ Active Land__________
*The numbers in this problem are very easy to work with. Make sure you understand the steps to
solve the problem, so you can apply them to problems with more complicated numbers.
3. Supply & Demand
A) Define (in your own words, please do not use the book, or other online resources) and give a
strong, unique, example for the following terms. Answers will be checked for originality.
ceteris paribus: ____________________________________________
_____________________________________________________
_____________________________________________________
________________________________________
_____________________________________________________
_____________________________________________________
factors of production:
inferior v. normal good: _______________________________________
_____________________________________________________
_____________________________________________________
demand: ________________________________________________
_____________________________________________________
_____________________________________________________
law of demand: ____________________________________________
_____________________________________________________
_____________________________________________________
________________________________________________
_____________________________________________________
_____________________________________________________
supply:
law of supply: _____________________________________________
_____________________________________________________
_____________________________________________________
B) Graph, explain & give a detailed example for the following:
Explain & give examples: Movement along the demand curve
Graph examples:
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
Explain & give examples: Shift of the demand curve
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
Graph examples:
Explain & give examples: Movement along the supply curve
Graph example:
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
Explain & give examples: Shift of the supply curve
Graph examples:
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
Equilibrium
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
Graph example:
C) Graphing & Predicting Equilibrium Price and Quantity
1. Use blue or black ink to create a graph in equilibrium.
2. Label the axis and the equilibrium price P* and the equilibrium quantity Q*
3. Use RED to show what happens to the market for the following event.
4. Write your prediction for what will happen to Q* & P* after the event.
List a few examples that would cause an increase in demand
Graph:
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
Equilibrium Prediction: _________________
List a few examples that would cause a decrease in demand
Graph:
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
Equilibrium Prediction: _________________
List a few examples that would cause an increase in supply
Graph:
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
Equilibrium Prediction: _________________
List a few examples that would cause a decrease in supply
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
Equilibrium Prediction: _________________
Graph:
Graph the market for “Good X” in
equilibrium.
Show (in red) what happens when the price
of “Good X” increases.
Graph the market for “Good X” in
equilibrium.
Show (in red) what happens when the price
of “Good X” decreases.
Equilibrium Prediction: __________
Equilibrium Prediction:
___________
D) Double shifts on the same market.
List an example that would cause demand & supply to increase
Graph:
_______________________________
_______________________________
_______________________________
_______________________________
Equilibrium Prediction: _________________
List an example that would cause demand & supply to decrease
Graph:
_______________________________
_______________________________
_______________________________
_______________________________
Equilibrium Prediction: _________________
List an example that would cause demand to increase & supply to decrease
_______________________________
_______________________________
_______________________________
_______________________________
Equilibrium Prediction: _________________
Graph:
E) Solve the mathematical problems below:
1. The demand and supply curves for hotdogs in California are given by the following two equations
Q D = 8,000 – 800P
Q S = 2,000 + 200P
Where QD represents quantity demanded, QS represents quantity supplied and P represents price.
a. Find the equilibrium quantity ______________and price: ______________
b. If students suddenly acquire a greater taste for hotdogs, which of the following would be the new
demand curve?
Circle the correct equation:
Q D = 6,500 – 800P
Q D = 9,500 – 800P
Find the new equilibrium quantity ______________and price: ______________
c. If instead one of the stores selling hotdogs goes out of business, which of the following might be
the new supply curve?
Circle the correct equation:
Q S = 1,200 + 200P
Q S = 2,800 + 200P
Find the new equilibrium quantity ______________and price: ______________
2. Consider the following supply and demand model of the world tea market (in billions of pounds.)
Price per Pound
Quantity Supplied Quantity Demanded
$0.38
1,500
525
$0.37
1,000
600
$0.36
700
700
$0.35
600
900
$0.34
550
1,200
___________ How big? ________
b. Is there a shortage or surplus at $0.34 per pound? ___________ How big? ________
c. Find the equilibrium quantity ______________and price: ______________
a. Is there a shortage or surplus at $0.38 per pound?
Graph the supply and demand curves and label the equilibrium, also correctly label your curves and
the axes.
F) Supply & Demand Graphing
For each of the events described below, draw a supply and demand diagram that illustrates the
event. Be sure to properly label all axes, curves and relevant points in your diagram. To the left of
your graph, write what economists would predict would happen to price and quantity, be sure to
denote if the market is in equilibrium in your prediction by using asterisks when necessary.
a. Gasoline Market: Strong growth in India, China, and the Middle East has increased worldwide
demand for gas.
b. Fresh Fruit Market: Walmart, the nation’s largest grocery retailer by far, vows to reduce the costs of
growing, picking and transporting fresh fruit. Because it’s now cheaper, families add more fresh fruit
to their daily diets.
c. Houses in California: Tighter lending standards make it more difficult for many families to borrow
money to buy a house. At the same time, thousands of houses taken by banks through foreclosure
are offered for sale.
d. Market for BMWs in the US: There is a new rebate for all domestically produced cars, BMW has
increased the amount of their automobiles that they are willing and able to sell in the US.
4. Government Intervention
A) Define (in your own words, please do not use the book, or other online resources) and give a
strong, unique, example for the following terms. Answers will be checked for originality.
price control: _____________________________________________
_____________________________________________________
_____________________________________________________
price ceiling: _____________________________________________
_____________________________________________________
_____________________________________________________
______________________________________________
_____________________________________________________
_____________________________________________________
price floor:
deadweight loss: ___________________________________________
_____________________________________________________
_____________________________________________________
Market or Social Surplus: ______________________________________
_____________________________________________________
_____________________________________________________
Price Floor
Graph:
_______________________________
_______________________________
_______________________________
_______________________________
Price Ceiling
_______________________________
_______________________________
_______________________________
_______________________________
Graph:
B) Solve the following mathematical problems:
1. Consider the market for hamburgers.
Price per Pound
Quantity Supplied
$11
6,000
$10
5,000
$9
4,000
$8
3,000
$6
2,000
$4
1,000
$2
0
Quantity Demanded
0
1,000
2,000
3,000
4,000
5,000
6,000
a) Create the graph based on the information above.
a.) What is CS: $________ PS: $________ Total Market Surplus (TMS): $ _______
b.) Draw a quota in red so people don’t eat too many hamburgers. What is the new
CS: $________ PS: $_________ TMS: $ _________ DWL: $_________
c.) Draw a price ceiling in red so people don’t pay more that $4. What is the new
CS: $________ PS: $_________ TMS: $ _________ DWL: $_________
d.) Draw a price floor in red so producers don’t sell for less than $10. What is the new
CS: $________ PS: $_________ TMS: $ _________ DWL: $_________

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Respond to the following scenario with your thoughts, ideas, and comments. Be substantive and clear, and use research

Apr 25, | Economics

Respond to the following scenario with your thoughts, ideas, and comments. Be substantive and clear, and use research to reinforce your ideas.

You’re meeting with Lester in his office to discuss the details of your presentation to the board next week.

“Given all of the research that you have completed over the past several weeks,” he says, “you should have most of the information you need to make a presentation to the board. The board doesn’t want you to do any more research on all of the topics; rather, we want you to summarize the research that you have already done. ”

“Yes,” you say. “I think I have what I need.”

“Of course we want your final conclusion and recommendation on what the company should do regarding the location issue, as well,” he says.

“What type of presentation do you have in mind, Lester?”

“A PowerPoint presentation would be appropriate for this group,” he says. “I want you to include slide notes, too, in case we have to go back and look at something at a later date. Your PowerPoint presentation should contain between 10–15 slides, not including the title slide and reference slide(s). For each slide, you should have between 150–200 words in the Notes sections. Let’s take a few minutes now to go over how the slides should be organized. I’ve done similar presentations, so I can save you some time with a few pointers.”

When you get back to your office, you type out your notes about each element you discussed and the overall organization of the presentation. For this presentation, you are addressing the following elements:

Legal, social, and financial factor considerations
Economic factors: gross domestic product (GDP), inflation, interest rates, unemployment
Elasticity of demand
Economies of scale and efficiency
Strengths, weaknesses, opportunities, and threats (SWOT)
Market structure
Risk
Costs (marginal, fixed, variable, etc.)
International expansion (Five factors that should be considered before making the decision to expand internationally)

Please submit your assignment.

For assistance with your assignment, please use your text, Web resources, and all course materials.