Microeconomics

ECON 205 Microeconomics

Assignment 1

Name _______________________________________

Essay Questions – 25 points each

1. Use the following production possibilities curve (also known as the production possibilities frontier) for a country to answer the questions below:

a. Which point(s) are unattainable? Briefly explain why.

b. Which point(s) are efficient? Briefly explain why.

c. Which point(s) are inefficient? Briefly explain why.

d. At which point, B, C, or D, is the country's future growth rate likely to be the highest? Briefly explain why.

2. In our current economic climate many people are advocating that the United States should only import those products that could not be produced here. Would be a good policy? Evaluate that position based on the concept of comparative advantage (also known as Ricardo’s Law of Comparative Advantage). Explain in your own words. Min of 100 or more and citations are required to be considered for full 25 points.

3. Suppose you win free tickets to a movie plus all you can eat at the snack bar for free. What would be the cost to you to attend the movie? Explain in your own words. Min of 100 or more words are required to be considered for full credit.

4. What is your understanding of the economic definition of scarcity?

a. Provide some examples of anything that is not scarce according to the economic definition?

Explain in your own words. Min of 100 or more words are needed for consideration for full credit.