1. The following table provides the quantity of fish and coconuts that each individual can catch or gather in one hour.
Coconuts Fish
Adam 6 2
Friday 6 4
a. Who has the absolute advantage in catching fish?
b. What is Friday's opportunity cost of gathering one coconut?
c. Who has the comparative advantage in catching fish?
2. Classify each statement as either a normative economic statement or a positive economic statement.
a. As a person consumes more and more of a good, marginal utility declines.
b. The United States has the best health care system in the world.
3. Consider the market for the Apple iPod, a normal good, for the month of September. Record in the following table how the following event would affect the market for an iPod. Use the words increase, decrease, unchanged, and uncertain.
Event Supply Demand Equilibrium Price Equilibrium Quantity {this is the table}
There is a technological advance in the manufacture of an iPod.
4. You own an electronics company that supplies to local businesses. In a typical month, you sell 200 Dell laptops and 200 HPlaptops. HP estimates the price elasticity of demand for their laptops to be -1.5. Dell estimates that the cross-price elasticity of demand between their laptop computers and HP laptops is 0.80 (Monday's lecture will help you answer this part of the question). This month HP lowered the price of their computers by 5 percent. Based on this information, what would expect to happen to your sales of HP and Dell computers? (State whether this change is an increase or decrease and give the percentage change.)
HP _____________ of ______________%
Dell ______________ of ____________%
Given your answers above, estimate the number of HP and Dell computers you will sell this month.
HP:_______________ Dell:_____________________
Representative multiple-choice questions.
5. If there is a surplus of a product, its price:
a. is in equilibrium.
b. is below the equilibrium level.
c. will rise in the near future.
d. is above the equilibrium level.
6. Suppose that steak and potatoes are complements. Then, other things being equal, an increase in the supply of steak will lower its price and:
a. increase the demand for potatoes and increase the price of potatoes.
b. increase the demand for potatoes and decrease the price of potatoes.
c. decrease the demand for potatoes and increase the price of potatoes.
d. decrease the demand for potatoes and decrease the price of potatoes.
1. The following table provides the quantity of fish and coconuts that each individual can catch or gather in one hour.
Coconuts Fish
Adam 6 2
Friday 6 4
a. Who has the absolute advantage in catching fish?
b. What is Friday's opportunity cost of gathering one coconut?
c. Who has the comparative advantage in catching fish?
2. Classify each statement as either a normative economic statement or a positive economic statement.
a. As a person consumes more and more of a good, marginal utility declines.
b. The United States has the best health care system in the world.
3. Consider the market for the Apple iPod, a normal good, for the month of September. Record in the following table how the following event would affect the market for an iPod. Use the words increase, decrease, unchanged, and uncertain.
Event Supply Demand Equilibrium Price Equilibrium Quantity {this is the table}
There is a technological advance in the manufacture of an iPod.
4. You own an electronics company that supplies to local businesses. In a typical month, you sell 200 Dell laptops and 200 HPlaptops. HP estimates the price elasticity of demand for their laptops to be -1.5. Dell estimates that the cross-price elasticity of demand between their laptop computers and HP laptops is 0.80 (Monday's lecture will help you answer this part of the question). This month HP lowered the price of their computers by 5 percent. Based on this information, what would expect to happen to your sales of HP and Dell computers? (State whether this change is an increase or decrease and give the percentage change.)
HP _____________ of ______________%
Dell ______________ of ____________%
Given your answers above, estimate the number of HP and Dell computers you will sell this month.
HP:_______________ Dell:_____________________
Representative multiple-choice questions.
5. If there is a surplus of a product, its price:
a. is in equilibrium.
b. is below the equilibrium level.
c. will rise in the near future.
d. is above the equilibrium level.
6. Suppose that steak and potatoes are complements. Then, other things being equal, an increase in the supply of steak will lower its price and:
a. increase the demand for potatoes and increase the price of potatoes.
b. increase the demand for potatoes and decrease the price of potatoes.
c. decrease the demand for potatoes and increase the price of potatoes.
d. decrease the demand for potatoes and decrease the price of potatoes.
