ECON 101 HW 2 HW 3 Macroeconomics

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timer Asked: Feb 4th, 2019
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Question Description

Attached are two worksheets for my macroeconomics class. Most of it is multiple choice questions with a few fill in the blank!

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HW 2 Due Monday January 4, 2019 (25 points) I. Suppose Frank and Nelson can produce pears and apples in a month as shown in the production possibilities table below. Frank Nelson Pears (pounds) 100 176 OR OR OR Apples (pounds) 200 44 Frank’s opportunity cost of producing a pound of pears is ______ pounds of apples. (0.5 pt) Nelson’s opportunity cost of producing a pound of pears is ______ pounds of apples. (0.5 pt) (Frank, Nelson) has the lower opportunity cost of producing pears. (0.5 pt) (Frank, Nelson) has a comparative advantage in producing pears. (0.5 pt) Frank’s opportunity cost of producing a pound of apples is ______pounds of pears. (0.5 pt) Nelson’s opportunity cost of producing a pound of apples is ______pounds of pears. (0.5 pt) (Frank, Nelson) has the lower opportunity cost of producing apples. (0.5 pt) (Frank, Nelson) has a comparative advantage in producing apples. (0.5 pt) Suppose that Frank and Nelson specialize according to their comparative advantage. Suppose that before specialization Frank and Nelson were producing pears and apples as shown below. Figures are in pounds. Frank Nelson Production Before Specialization (pounds) Pears Apples AND 50 100 AND 88 22 Suppose that Frank and Nelson agree to trade 86 pounds of pears for apples at the rate of 1 pound of pears for 1 pound of apples. COMPLETE THE TABLE BELOW. (8 points) After Trade Available For Consumption (pounds) Pears Apples AND Frank AND Nelson COMPLETE THE TABLE BELOW. The gain from trade is: (12 points) Frank Nelson TOTAL GAINS Gains From Trade (pounds) Pears Apples AND AND AND II. The following table describes points on a production possibilities curve. Use it to answer Questions II below. (10 points) A 100 0 Capital Goods Consumer Goods Production Possibilities (alternatives) B C D E 95 85 70 50 100 180 240 280 F 0 300 a. Refer to the above table. If the economy is producing at production alternative C, the opportunity cost of an additional unit of consumer goods is ______ units of capital goods. b. Refer to the above table. If the economy is producing at production alternative C, the opportunity cost of an additional unit of capital goods is ______ units of consumer goods. c. Refer to the above table. If the economy is producing at production alternative E, opportunity cost of an additional unit of capital goods is ______ units of consumer goods. d. Refer to the above table. If the economy is producing at production alternative A, opportunity cost of an additional unit of consumer goods is ______ units of capital goods. e. Refer to the above table. The choice of alternative B compared with alternative A would tend to promote a (faster, slower) rate of economic growth. III. Refer to David’s and Andrew’s production possibilities frontiers shown above: (4 points) a. David’s opportunity cost of producing a gizmo is ______ widgets. b. Andrew’s opportunity cost of producing a gizmo is ______widgets. c. (David, Andrew) has a comparative advantage in producing gizmos. d. (David, Andrew) has a comparative advantage in producing widgets. David’s PPF Andrew’s PPF 5 3 Gizmos Gizmos Widgets 9 Widgets 9 ECON 101A HW 3 due Monday, February 4, 2019 Price ($ per gallon of gasoline) 2.00 2.50 3.00 4.00 3.50 Quantity Demanded (million gallons) 15 12 9 6 3 Quantity Supplied (million gallons) 3 6 9 12 15 1. Refer to the above data for the Midwest for December 2018. The equilibrium price of gasoline is $________ and the equilibrium quantity is ________ million gallons. There would be a (surplus, shortage) of _______ million gallons of gasoline at a market price of $15 per gallon. There would be a (surplus, shortage) of _______ million gallons of gasoline at a market price of $3 per gallon. 2. If there were a severe blizzard that destroyed the crop of oranges: A. The (demand, supply) curve for oranges would shift (right, left) and the equilibrium price of oranges would (fall, rise). B. In the market for orange juice, (demand, supply) curve for orange juice would shift (right, left) and the equilibrium price of orange juice would (fall, rise). 3. a. b. c. d. If the price of hamburgers decreases, most likely this will cause an increase in the demand for hamburgers. an increase in the price of substitutes for hamburgers. an increase in the price of complements for hamburgers. a decrease in the supply of hamburgers. 4. Which of the following is correct? a. An increase in demand results in a temporary surplus, leading to competition between consumers, which pushes the product’s price down. b. An increase in supply results in a temporary shortage, leading to competition between suppliers, which pushes the product’s price up. c. An increase in demand results in a temporary shortage, leading to competition between consumers, which pushes the product’s price down. d. An increase in supply results in a temporary surplus, leading to competition between suppliers, which pushes the product’s price down. 5. a. b. c. d. If farmers leave the cattle-producing industry, the result will be lower prices for cattle but a higher equilibrium quantity. higher prices for cattle but a higher equilibrium quantity. lower prices for cattle but the same equilibrium quantity. higher prices for cattle but a lower equilibrium quantity. 6. An increase in incomes will (increase, decrease) the demand for steak if steak were a normal good, and (increase, decrease) the demand for steak if steak were an inferior good. 7. Draw a diagram showing equilibrium in the market for candy. Clearly label your axes and curves. Now show the effect of an increase in the price of sugar in the same diagram and mark the new equilibrium. The equilibrium price of candy (increases, decreases) and the equilibrium quantity of candy (increases, decreases). 8. When a spell of good weather results in a very large increase in the orange crop, newspapers are likely to report “a surplus of oranges.” An economist would say that a. the surplus will last until the next growing season when fewer oranges can be produced. b. the surplus is temporary and will be eliminated when the price of oranges falls. c. the existing price of oranges must be below the equilibrium level. d. the good weather would lead to a shortage of oranges, not a surplus. 9. If the price of cotton fabric increases and the price of short-sleeved shirts increased, the equilibrium piece of cotton T-Shirts would _______ and the equilibrium quantity of T-Shirts would _______. a. increase, increase b. increase, decrease c. is indeterminate, increase d. increase, is indeterminate 10. If the demand curve for Dairy Queen blizzards (which are made of ice cream and other ingredients like cookies or chocolate pieces ice cream) shifts to the right, this could be due to a. a decrease in the price of a Dairy Queen blizzard. b. a decrease in consumer income. c. a decrease in the price of other kinds of ice cream. d. an increase in the price of frozen yogurt. ...
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Tutor Answer

Dr12123
School: Duke University

Hey, here is the assignment. Kindly let me know in case you want any changes to be made. Thanks.

HW 2 Due Monday January 4, 2019 (25 points)
I. Suppose Frank and Nelson can produce pears and apples in a month as shown in the
production possibilities table below.

Frank
Nelson

Pears (pounds)
100
176

OR
OR
OR

Apples (pounds)
200
44

Frank’s opportunity cost of producing a pound of pears is 0.5 pounds of apples. (0.5 pt)
Nelson’s opportunity cost of producing a pound of pears is 4 pounds of apples. (0.5 pt)
(Frank, Nelson) has the lower opportunity cost of producing pears. (0.5 pt)
(Frank, Nelson) has a comparative advantage in producing pears. (0.5 pt)
Frank’s opportunity cost of producing a pound of apples is 2 pounds of pears. (0.5 pt)
Nelson’s opportunity cost of producing a pound of apples is 0.25 pounds of pears. (0.5 pt)
(Frank, Nelson) has the lower opportunity cost of producing apples. (0.5 pt)
(Frank, Nelson) has a comparative advantage in producing apples. (0.5 pt)
Suppose that Frank and Nelson specialize according to their comparative advantage.
Suppose that before specialization Frank and Nelson were producing pears and apples as shown
below. Figures are in pounds.

Frank
Nelson

Production Before Specialization (pounds)
Pears
Apples
AND
50
100
AND
88
22

Suppose that Frank and Nelson agree to trade 86 pounds of pears for apples at the rate of 1
pound of pears for 1 pound of apples. CO...

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Review

Anonymous
Good stuff. Would use again.

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