Assignment 1

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Department of Economics, School of Business and Management American University of Sharjah Principles of Macroeconomics Practice Assignment 1 (chapters 1 &2) Instructor: Dr. Javed Younas Name: ___________________________________ AUS e-mail id: ________________ 1. Amira is thinking about going to the movies tonight. A ticket costs $7 and she will have to cancel her baby-sitting job that pays $30. The cost of seeing the movie is: a. $7 b. $30 c. $37 d. $37 minus the benefit of seeing the movie. 2. Alaa received a four-year scholarship to attend a university that covered tuition and fees, room and board, and books and supplies. As a result a. attending the university for four years is costless for Alaa. b. Alaa has no incentive to work…show more content…
you give up less to accomplish that task than do others. you have specialized in that task, while others have not. 12. Suppose that a further increase in specialization allows a country to increase total output by 10% but afterward it was discovered that work absenteeism increased by 30%. This is likely an example of a. modern production. b. too much specialization. c. too little specialization. d. inefficiencies caused by labor unions. Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. Table 3 Hours Needed to Make 1 Car Airplane 30 150 50 150 Quantity Produced in 2400 Hours Cars Airplanes 80 16 48 16 Japan Korea 13. Refer to Table 3. Suppose Japan decides to increase its production of cars by 45. What is the opportunity cost of this decision? a. 9 airplanes b. 15 airplanes c. 135 airplanes d. 225 airplanes 14. Refer to Table 3. Japan should specialize in the production of a. cars and import airplanes. b. airplanes and import cars. c. both goods and import neither good. d. neither good and import both goods. 15. You had to pay $600 (non-refundable) for your meal plan for Fall semester which gives you up to150 meals. If you eat only 100 meals, your marginal cost for the 100th meal is a. $6 b. $4 c. $0.25 d. 0$ 16. Specialization based on lower opportunity cost and trade are closely linked to a. b. c. d. absolute advantage. Gains and loss to the buyers. comparative advantage. shrinkage of the economic

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