Reference no: EM131210535

Economics Assignment

Activity 1 - The Budget Constraint

Graph an example of a budget constraint (or the consumption choice opportunity frontier) for the purchase of two different goods or services. State the budget in the form of an equation (Budget = P1*Q1 + P2*Q2). Calculate the slope of the line and interpret in words what the slope means.

Activity 2-­- Key Terms

Define the following terms:

1) Marginal Analysis -

2) Utility-­-

3) Law of Diminishing Marginal Utility-­-

4) Sunk Costs-­-

Activity 3 - Straight-­-line Production Possibility Frontier (PPF)

Construct a straight-­-line PPF relating the production of two goods for an individual business firm. Calculate and interpret the slope of the PPF. Show a point that is "inefficient" (idle resources), a point that is "efficient" (full employment), and a point that is "unattainable".
Explain what a movement along the curve means. How is the budget constraint similar to and different from a PPF?

Activity 4 - Bowed-­-out Production Possibility Frontier (PPF)

Construct a bowed-­-out PPF relating the production of two goods for an entire economy. Explain what happens to the opportunity cost of production as more of one good is made. How could the PPF experience economic growth? Show what that would look like. How does this relate to law of diminishing returns?

Activity 5 - Comparative Advantage, Trade, and the PPF

Graph two different economy's PPF, illustrating the concept of comparative advantage. In order for the consumers of each country to be better off, explain which good each country should export to and import from the other.

Activity 6 - Positive vs. Normative Statements

Explain the difference between positive statements and normative statements by giving an example of each. Are budget constraints and PPFs positive or normative by their nature? How do consumers (budget constraints) or entire society's (PPF) declare normative statements by their decision on the graph?

1. Define "economics"

2. Who is Adam Smith, and why is he famous?

3. What is meant by "division of labor"? How does it work?

4. What is the difference between Microeconomics vs. Macroeconomics?

5. Contrast "monetary policy" from "fiscal policy".

6. Recreate and explain the circular flow model (you may use the whiteboard)

7. Contrast: Traditional Economy, Command Economy, Market Economy

8. What is globalization? Relate this to imports/exports

The Algebraic Models

1. A. Identify each component of the linear equation:

Y = m * x + b

2. In words, what does this tell us about the relation between the x variable and the y variable?

Scenario 1: College Ski Club

A college ski club organizes day-­long bus trips to a ski area each semester.

• The club charges $15 per passenger
• The club receives a $100 grant from the student government per semester.

1. Based on the information above, fill in the total revenue that the Ski Club brings in on the table, based on the number of skiers it recurits. Next, Graph Points A-­E on the graph associated graph.

2. Calculate the slope of the line you drew above. Interpret in words what the slope tells us.

3. Determine the linear equation that represents this data (remember: Y = mX + b).

4. Assume that the student government increases the student club grant to $300 instead. Show how this impacts the graph.

5. Instead, assume that the Ski Club increases ticket prices to $20 (student government still grants $100 each semester). Show how that impacts the graph.

Scenario 2: Speeding is Bad for Your Budget

Assume that for every 5 miles per hour (MPH) that one drives over 65 MPH, the average car's fuel economy (measured in miles per gallon, or MPG) decreases by 2 MPG. If a car travels exactly at 65 MPH, then it has 40 MPG.

6. Graph this relation as a line graph, putting the independent variable on the x-­axis and dependent variable on the y-­axis.

7. Calculate the slope of the line.

8. Interpret the slope of the line in words.

Scenario 3: Hiring Waiters in a Small Restaurant

You are a manager of a small restaurant, and you need to know how many waiters should be staffed (depending on anticipated number of tables to be served). Based on past experience, you have collected the following data.

Total Number of Waiters Staffed	Total Number of tables Served
0	0
1	8
2	14
3	18
4	20
5	20

9. Make a line graph of the data above in the space below.

10. Estimate the slope at two different points on the graph. Show on your graph.

11. What is happening to the slope of the line as more waiters are being hired?

Line Graphs, Pie Charts, and Bar Graphs

12. Create your own examples of each of the types of graphs below. You may make up your own data, but make sure to fully label all parts of the graphs and charts!

a. Line Graph

b. Pie Chart

c. Bar Graph

13. For each relation of data, label whether it is best to use a line graph, pie chart, or bar graph to represent the data.

a. The percentage of the population by religious affiliation:

b. The number of hours playing video games by age groups

c. The average number of dogs walked in a community (in a week) by outside temperature

d. Average number of calories consumed by country

e. Number of houses built by year

f. Students' favorite color at a school

g. The GDP of 10 countries, in order from highest to lowest.