c.2 problem sets
if individuals pursue their own when participating in the markets, per adam smith, those individuals are being guided by
an "invisible hand" that will also lead to a promotion of the greater good.
charlie the cat stole $20 from his cat mom. he's planning on spending the money he stole on catnip (Q1) and dental treats (Q2). dental treats are more expensive at $3 per treat, but catnip is pretty cheap at $0.50 per pouch. what will charlie's budget constraint look like?
$20 = $0.50 x Q1 + $3 x Q2
suppose julia has a budget of $40 that she spends on movies (Q1) and rollerskating (Q2). the price of movie tickets recently increased from $7 per person to $10 per person and the price of roller skating decreased from $5 to $4 per person. what is julia's new budget constraint?
$40 = $10 x Q1 + $4 x Q2
suppose your marginal cost of making a peanut butter and jelly sandwich is constant at $10, but the marginal benefit of eating the sandwich decreases from $12 for one sandwich, to $10 for two sandwiches, to $8 for three sandwiches, to $6 for four sandwiches. how many sandwiches would you eat?
2 sandwiches
suppose your current budget amount can buy either 6 watches or 3 ties. what is the opportunity cost of purchasing a tie?
2 watches
if a family spends its entire budget in a given time frame, the family can afford either 45 food items or 15 pieces of clothing. assuming the family spends its entire budget on just these two goods, what is the opportunity cost of one piece of clothing in the time frame?
3 food items
jack buys only shoes and socks. if jack spends his entire budget on shoes, he can buy 9 pairs of shoes. if jack spends his entire budget on socks, he can buy 72 pairs of socks. what is the opportunity cost of 6 pairs of shoes?
48 pairs of socks
jim and norma go wine and oyster tasting. they set a budget of $100 for the day. wine tastings (P1) are $10 per flight and oysters on the half shell (P2) are $2 each. according to their budget constraint, how many oysters are they able to purchase if they order 2 flights?
Q2 = 40 oysters
josh is just learning to manage his finances. he knows that he makes $50 a month in chores that he can spend on whatever he wants. right now, he is interested in buying more video games (Q1) and goldfish (Q2) for his aquarium. video games are expensive and cost $25 per game, but goldfish are cheaper and are only $5 per fish. using josh's budget constraint, how many goldfish can he purchase if he purchases one video game?
Q2 = 5 goldfish
in economics, opinions based on one's personal beliefs can best be described as
normative statements
deborah uses $21 each month to buy yoga classes and candy bars. the cost of a yoga class is $3 and the cost of a candy bar $1.50. budget constraint?
between $14 candy bars + 7 yoga classes
megan received $180 for her birthday and wants to spend this money on movie tickets and computer games. movie tickets cost $10 each. computer games cost $30 each. graph megan's budget constraint by moving the endpoints of the line segment in the graph.
between 6 computer games + 18 movie tickets
carissa has $15 to spend on folders and notebooks. folders cost $1.25 each. notebooks cost $2.50 each. graph carissa's budget constraint by moving the endpoints of the line segment in the graph.
between 6 notebooks + 12 folders
jerry enjoys both soda and popcorn, and he has a weekly budget of $28 for these items. sometimes he will buy more soda, and other times, he will buy more popcorn. soda cost $2 per bottle, and popcorn costs $4 per bag. budget constraint?
between 7 popcorn + 14 soda
the production possibilities frontier has a ____________ due to the law of diminishing returns.
curved shape
positive statements ______________.
define the world as it is
true or false: if mary has a budget of $12 to spend on soda and pizza and if sodas cost $1 and slices of pizza cost $1.50, mary's budget constraint can be written as 12 = Psoda x $1 + Ppizza x $1.50, where P represents a price.
false
true or false? if deborah uses $21 each week to buy juice and lottery tickets and the cost of bottles of juice is $3 and the cost of lottery tickets is $1.50, deborah's budget constraint can be written as $21 = Ptickets x $3 + Pjuice x $1.50
false
true or false? marginal analysis compares total benefits and total costs to determine the optimal outcome or choice rather than how costs and benefits change from one option to another.
false
which scenario is asking you to apply marginal analysis?
it costs $3 to go down the water slide. the first time you go down the slide, you are really excited, but your interest decreases each time you go down. how many times should you go down the water slide?
as additional increments or marginal resources are added to either healthcare or education, the marginal benefit from those additional increments will decline. what do economists call this pattern?
law of diminishing returns
which of the following scenarios involves an individual correctly using marginal analysis to make a decision about what to consume?
susie examines the cost and benefit associated with eating individual cookies before deciding how many cookies to eat.
opportunity cost is defined as _______________
the measure of cost by what is given up in exchange for what is obtained
a nation's comparative advantage in the production of an item is determined by _____________.
the opportunity cost of producing the item relative to a trading partner's opportunity cost
the opportunity cost of producing one bushel of wheat in canada is equal to 1/2 computer. the opportunity cost of producing one bushel of wheat in the u.s. is 2 computers. if these two countries specialize according to comparative advantage and then trade with each other, which of the following is an expected outcome?
the u.s. will import wheat and export computers.
true or false? john says to his friend, "this concert is going to cost me $20 when i buy the ticket." his friend corrects him and says, "actually, this concert will cost you more than $20 since you have to miss work." his friend is referring to the opportunity cost.
true