. On the diagram below, draw budget lines for trading with Friday and for trading with Kwame. (Put coconuts on the vertical axis.) Instructions: Use the tools provided 'Friday' and 'Kwame' to draw two separate budget lines representing Friday's willingness to trade and Kwame's willingness to trade. The lines should contain only the two endpoints of each line. Coconuts 30 25 20 15 10 5 0 10 20 30 40 50 60 70 Tools (Click to select) Friday Kwame Instructions: Enter your answers rounded to two decimal places. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. What is the slope of the budget line from trading with Friday (coconuts for fish)? What is the slope of the budget line from trading with Kwame (coconuts for fish)? Which budget line features a larger set of attainable combinations of coconuts and fish? If you are going to trade coconuts for fish, would you rather trade with Friday or Kwame? (Click to select) ♥

. On the diagram below, draw budget lines for trading with Friday and for trading with Kwame. (Put coconuts on the vertical axis.) Instructions: Use the tools provided 'Friday' and 'Kwame' to draw two separate budget lines representing Friday's willingness to trade and Kwame's willingness to trade. The lines should contain only the two endpoints of each line. Coconuts 30 25 20 15 10 5 0 10 20 30 40 50 60 70 Tools (Click to select) Friday Kwame Instructions: Enter your answers rounded to two decimal places. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. What is the slope of the budget line from trading with Friday (coconuts for fish)? What is the slope of the budget line from trading with Kwame (coconuts for fish)? Which budget line features a larger set of attainable combinations of coconuts and fish? If you are going to trade coconuts for fish, would you rather trade with Friday or Kwame? (Click to select) ♥

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter2: Productions Possibilities, Opportunity Costs, And Economic Growth

Section: Chapter Questions

Problem 2SQ

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Scenario: Suppose that you are on a desert island and possess exactly 20 coconuts. Your neighbor, Friday, is a fisherman, and he is willing to trade 2 fish for every 1 coconut that you are willing to give him. Another neighbor, Kwame, is also a fisherman, and he is willing to trade 3 fish for every 1 coconut. The slope of budget line from trading with Friday is -0. 5. This shows for every coconut you give up, Friday must give up 2 fish. -The slope of budget line from trading with Kwame is -0. 3. So for every coconut you give up, Kwame must give up three fish. 1) Which budget line features a larger set of attainable combinations of coconuts and fish?
Jane has 11 liters of soft drinks and 10 sandwiches. Bob, on the other hand, has 9 liters of soft drinks and 10 sandwiches. With these endowments, Jane's marginal rate of substitution (MRS) of soft drinks for sandwiches is 6 and Bob's MRS is equal to 8. Draw an Edgeworth box diagram to show whether this allocation of resources is efficient. If it is explain why. If it is not, what changes will make both parties better off? Part 2 1.) Using the three-point curved line drawing tool, draw an indifference curve for Jane when consuming 11 liters of soft drinks and 10 sandwiches. Label this curve UJ. 2.) Using the three-point curved line drawing tool, draw an indifference curve for Bob when consuming 9 liters of soft drinks and 10 sandwiches. Label this curve UB.
Suppose that there are three beachfront parcels of land available for sale in Astoria, and six people who would each like to purchase one parcel. Assume that the parcels are essentially identical and that the selling price of each is $745,000. The following table states each person's willingness and ability to purchase a parcel. Willingness and Ability to Purchase (Dollars) Alyssa 720,000 Brian 690,000 Crystal 680,000 Nick 900,000 Rosa 810,000 Tim 770,000 Which of these people will buy one of the three beachfront parcels? Check all that apply. Alyssa Brian Crystal Nick Rosa Tim Assume that the three beachfront parcels are sold to the people you indicated in the previous section. Suppose that a few days after the last of those beachfront parcels is sold, another essentially identical beachfront parcel becomes available for sale at a price of $732,500. This fourth parcel _____________be sold…
Consider a simple exchange economy with two people: Bob and Jake. Bob and Jake both have ten hoursof time available. The can use their time to do one of two things: make pancakes or make hamburgers.Bob can make two hamburgers in an hour or one pancake in an hour. Jake can make three pancakes in anhour or two hamburgers in an hour. Use this information to answer the following questions:a.) Draw Jake and Bob’s PPFs, with hamburgers on the x-axis.b.) Give equations for Jake and Bob’s PPFs in y = mx+b form, still treating hamburgers as the xvariable.c.) Who has absolute advantage in the production of hamburgers? Who has absolute advantage inthe production of pancakes?d.) Who has comparative advantage in the production of hamburgers? Who has comparativeadvantage in the production of pancakes?e.) Can Bob and Jake both benefit from trade if the terms of trade are one pancake per hambruger?Why
A consumer have budget amounting to $400 which he could spend on two goods such as ice cream at $25 and a slice of bread at $40. Assuming that the ice cream will be located aling the vertical axis, and bread slice along the horizontal axis, what is the opportunity cost of bread in terms of the ice cream? (How many units of ice cream will be given up to gain a slice of bread?) Answer in absolute value.
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Suppose you won $15 on a lotto ticket at the local 7-Eleven and decided to spend all the winnings on candy bars and bags of peanuts. The price of candy bars is $.75 and the price of peanuts is $1.50. Suppose that you had won $30 on your ticket, not $15. Show the $30 budget line in your diagram. Why would this budget line be preferable to the old one?
A consumer have budget amounting to $400 which he could spend on two goods such as ice cream at $25 and a slice of bread at $40. Assuming that the ice cream will be located aling the vertical axis, and bread slice along the horizontal axis, what is the opportunity cost of ice cream in terms of the bread? (How many slice of bread will be given up to gain a unit of ice cream?) Answer in absolute value.
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Suppose you would have to pay Alicia at least $150 to get her to part with a ticket she just bought to see her favorite band play next Friday. Loss aversion implies that if Alicia had not yet bought the ticket, she would: Multiple Choice no longer be interested in purchasing it. be willing to pay more than $150 for it. be willing to pay exactly $150 for it. be willing to pay less than $150 for it.
Ali’s preferences are such that he is willing to trade 4 Hotdogs for 1 ticket to a T-20 Pak-India cricket final. If hotdogs cost $8 each and a ticket to Pak-India cricket final game costs $40, should Hassan make the trade? Explain with a logical intuition (not just words) why or why not?
Consider a two-person exchange economy in which person 1 owns 200 units of x and 100 units of y while person 2 owns 100 units of x and 200 units y. Suppose their preferences over the two goods can be represented as: U1 (x, y) = y + 50Inx U2 (x, y) = y + 150lnx 1. How much of x do they trade among each other? 2. Does the First Welfare Theorem (FWT) hold in this economy? 3. Can some individuals be made better off if we are at the Pareto efficient allocation?