The resource cost to produce fish and oil are
listed below.
Fish
Oil
Britain
30
10
Norway
60
30
1.Assume that each country has resources fixed
at 120 units during the given time period. Fill in
the table below with the maximum amount of
fish or oil that Britain and Norway can produce
from these resources.
Fish
Oil
Britain
4
12
Norway
2
4
1.What is the opportunity cost of producing 1 ton of fish in Britain?
3 tons of oil
2.What is the opportunity cost of producing 1 ton of fish in Norway?
2 tons of oil
3.Which country has an absolute advantage in the production of fish?
Britain
4.Which country has a comparative advantage in the production of fish?
Norway
In the next figure, assume that the economy is operating at point A.
wheat
B
30
10
A
20
Soybeans
1. Why might the economy be operating at point A?
Because the economy is in a recession
2. What is the opportunity cost of moving to B?
There is no opportunity cost because you are not
simply shifting production, you are increasing the
the overall production of the economy
Liza needs to buy a textbook for her Economics class tomorrow. The
price at the college bookstore is $65. One online site offers it for $55
and another site, for $57. All prices include sales tax. The
accompanying table indicates the typical shipping and handling
charges for the textbook ordered online.
Shipping method
Standard shipping
Second-day air
Next-day air
Delivery time
3–7 days
2 business days
1 business day
Charge
$3.99
$8.98
$13.98
8. What is the opportunity cost of buying online instead of
at the bookstore? Note that if you buy the book online,
you must wait to get it.
THE SHIPPING TIME BECAUSE IN ORDER TO GET A DEAL
ON THE PRICE, YOU HAVE TO DO 2 DAY SHIPPING OR
MORE
9. Show the relevant choices for Liza. What determines
which of these options Liza will choose?
1) BUY THE BOOK @ BOOKSTORE @ $65
2)BUY BOOK ONLINE @ $63.98 ($55 + 8.98 2-DAY SH)
3) BUY BOOK ONLINE @ $58.99 ($55 + 3.99 3-7 DAY SH)
$5
D1
D2
S1
$4
S2
$3
$2
$1
200 400 600 800 1000
$3
10. EP 1: ______
$3
11. EP 2: ______
12. What might cause the shift in supply from S1 to S2?
MORE RESOURCES OR BUNS BECOME CHEAPER
13. What might cause the shift in demand from D1 to D2?
PEOPLE ARE JUST HUNGRIER
M 14. What will happen to the supply curve for iPads if
_____
Apple lowers the selling price of them?
SI 15. What will happen to the supply curve for
_____
automobiles if Nissan was to leave the auto
industry?
SI 16. What will happen to the supply curve if Nintendo
_____
predicts it will sell the Wii at a lower price?
SI 17. What will happen to the supply curve for solar
_____
panels if the federal government rejects a subsidy
to help pay for the costs?
M 18. What will happen to the supply curve for pizza if
_____
Edies raises the prices of its pizzas?
SO 19. What will happen to the supply curve if Moog
_____
workers become more efficient?
S1
$30
S2
$20
$10
200
400
600
800
1000
20. What happened to the supply curve for National Fuel?
THE CURVE SHIFTED OUT
21. Which factor of change caused this change?
NEW RESERVES FOUND THAT ARE EASILY ACCESSIBLE
M 22. What will happen to the demand curve for IBM if they
____
lower the price of their PC’s?
SO 23. What will happen to the demand curve for bottled
____
water if there is a hot week forecasted?
SO 24. What will happen to the demand curve for chocolate
____
the week leading up to Valentine’s Day?
SO 25. What will happen to the demand curve for Sabres
____
Jerseys at the beginning of the NHL Season?
$5
D1
D2
$4
$3
$2
$1
200 400 600 800 1000 1200
26. Does it shift left, shift right or move along the curve?
SHIFT RIGHT
____________________________
27. What factor of change causes this?
IT’S A HOTTER DAY
__________________________________________
Please choose whether the following is:
1. Elastic
2. Inelastic
2 28. Water
____
2 29. Salt
____
Match the curve with its label.
A. Elastic demand curve
B. Inelastic demand curve
C. Elastic supply curve
D. Inelastic supply curve
1 30. Coffee
____
1 31. Chocolate
____
B
32.) ______
C
34.) ______
D
33.) _____
A
35.) ______
Directions: For each of the following, indicate whether the group would be classified as
Employed (E), Unemployed (U), or not counted (NC).
Wharton, TX has a population of 9,000. Of that 9,000:
E
36. ________
a. 6,000 work as paid employees.
U b. 1,100 are unemployed, but are looking for work.
37. ________
NC c. 1,400 are unemployed and have given up looking for work.
38. ________
NC d. 450 are retired and go fishing daily.
39. ________
NC e. 50 quit their jobs last year to go back to college.
40. ________
Now, calculate the following:
7,100 41. How many people would be included in the workforce?
________
15.5% 42. What is the unemployment rate for Wharton, TX?
________
1,400 43. How many people from above would be considered discouraged workers?
________
Directions: Answer questions by filling in an A (Traditional), B (Command), or C
(Market) on the space provided.
A 44. Which economic system rejects new methods of farming?
_____
C 45. Which economic system allows for the greatest individual freedom?
_____
A 46. Which economic system features gender-based roles for its members and
_____
offers predictability and stability?
C 47. Which economic system can change production goals quickly?
_____
B 48. Which economic system is based on government directives?
_____
In 2012 you bought a used car for $4000. It was originally purchased in 2004 for
$13,000. You have your mechanic look it over and fix some things on it for a cost of
$550.
2 49. How many dollars would be recorded in 2012 GDP?
____
1.$100
2. $550
3. $4550
4. $13,000
4 50. How many dollars would be recorded in 2004 GDP?
____
1.$100
2. $550
3. $4550
4. $13,000