ECON 213 PROBLEM SET 1 - LIBERTY UNIVERSITY
Discipline: Economics
Type of Paper: Question-Answer
Academic Level: High school
Paper Format: APA
Question
Problem Set 1
Name:
______________________________________________
Problem Set 1 is due
by 11:59 p.m. (ET) on Monday of Module/Week 2.
1. Based
on the information provided below for the market for video games, answer the
following questions:
PRICE |
Q DEMANDED |
Q SUPPLIED |
$50 |
5 |
9 |
$45 |
7 |
7 |
$40 |
9 |
5 |
$35 |
11 |
3 |
$30 |
13 |
1 |
a.) Draw
and properly label the demand and supply graphs (this means you must label the
axes and any lines you include on the graph).
b.) What
is the equilibrium price and quantity?
PRICE:
______________________
QUANTITY: ______________________
Now, assume that a new
government report claims that video game play stimulates the brain.
c.) What
will this do to the demand curve? Of the list of things in the text that cause
a change in demand, which best fits here as the cause of the demand shift?
d.) What
will happen to the equilibrium price and quantity?
P:
_______________________
Q: _______________________
2. Based
on the information provided below for the state of Montana, answer the
following questions:
CHOICE |
OIL / barrels |
WHEAT / bushels |
A |
5000 |
0 |
B |
4500 |
10000 |
C |
2500 |
20000 |
D |
0 |
25000 |
a.) Draw
the Production Possibilities Curve.
b.) Determine
the opportunity costs for a move from A to B; B to C; and C to D.
A to B:
_____________ B to C:
__________________
C to D: _________________
3. In
the space provided below, do the following:
a.) Draw
and properly label a demand and supply curve.
b.) Indicate
where the equilibrium Price and Quantities are located.
c.) How
do things change based on the following scenario?
· The
market for hybrid cars is changing. There are more providers but due to bad
publicity and poor performance, demand is falling.
Knowing this
information, answer the following questions and then show the
corresponding information in your graph:
a.)
b.)
c.)
d.) What
is the market you are dealing with?
e.) Which
curve(s) change(s)? Based on the lists in the text of what causes demand and
supply to shift, what are the causes of these shifts?
f.) In
what direction do they change?
g.) What
happens to the equilibrium price and quantity after these changes are put into
effect? Do they go up, go down, or stay the same?
P:
_______________________
Q: _______________________
4. Mario
has reached a crossroads in his life. He is trying to decide whether to change
careers. Currently, Mario makes pizzas, but he is considering entering a
different line of work testing video games. Mario can either test 6 games or
toss 12 pizzas in a day. Interestingly, Mario’s friend Luigi is in a similar
predicament. Luigi can test 3 games or toss 2 pizzas during a day.
Mario’s opportunity
cost of testing one game: ___________________________
(yes, you can test
fractional games)
Luigi’s opportunity
cost of testing one game: ___________________________
(yes, you can test
fractional games)
Mario’s opportunity
cost of tossing one pizza: ___________________________
(yes, you can have
fractional pizzas)
Luigi’s opportunity
cost of tossing one pizza: ___________________________
(yes, you can have
fractional pizzas)
Who has an absolute
advantage in testing games? ________________________
Who has the
comparative advantage in testing games? _____________________
Who has the
comparative advantage in making pizzas? __________________
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