George and John, stranded together on an island, use clamshells for money. Last year George caught 300 fish and 11 wild boars. John grew 200 bunches of bananas. In the two-person economy that George and John set up, fish sell for 2 clamshells each, boars sell for 10 clamshells each, and bananas go for 5 clamshells per bunch. George paid John a total of 30 clamshells for helping him to dig bait for fishing, and he also purchased five of John's mature banana trees for 30 clamshells each. What is the GDP of George's and John's island in terms of clamshells? Instructions: Enter your response as whole number. clamshells. GDP:
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- Potatoes cost Janice $1 per pound, and she has $5.00 that she could possibly spend on potatoes or other items. If she feels that the first pound of potatoes is worth $1.50, the second pound is worth $1.14, the third pound is worth $1.05, and all subsequent pounds are worth $0.30, how many pounds of potatoes will she purchase? What if she only had $2 to spend?Pat and Kris are roommates. They spend most of their time studying (of course), but they leave some time for their favorite activities: making pizza and brewing root beer. Pat takes 4 hours to brew a gallon of root beer and 2 hours to make a pizza. Kris takes 6 hours to brew a gallon of root beer and 4 hours to make a pizza. The price of pizza can be expressed in terms of gallons of root beer. What is the highest price at which pizza can be traded that would make both roommates better off? What is the lowest price? Explain.Paul, Noel, and Sandi work in a bakery where they make pies and cakes. In one day, Paul can make 5 pies or 5 cakes or any combination of these two goods that lie on the same line containing these two production points. Noel can make 30 pies or 10 cakes or any combination of these two goods that lie on the same line containing these two production points. Sandi can make 12 pies or 6 cakes or any combination of these two goods that lie on the same line containing these two production points. Assume that the production possibility frontier (PPF) of each person is a straight line. What are the opportunity costs of producing 1 pie in terms of the number of cakes for Paul, Noel, and Sandi? a. The opportunity cost of producing 1 pie for Paul is 1 cake; for Noel is one third of a cake; for Sandi is one half of a cake. b. The opportunity cost of producing 1 pie for Paul is 1 cake; for Noel is three cakes; for Sandi is one half of a cake. c. The opportunity cost of…
- Kiran and Amna live in IBA hostel. They own a small business in which they make brownies and pasta and sell them to people on campus. As shown in the table on the following page, Kiran can make 30 brownies per hour but only 6 bowls of pasta. Amna is a bit slower and can make only 24 brownies or 4 bowls of pasta in an hour Suppose that Kristen and Anna can sell all their brownies for PKR10 each and all their pasta bowls for PKR 50 each. If each of them worked 20 hours per week, how should they split their time between brownies and pasta? What is their maximum joint revenue?Consider a simple exchange economy with two people: Bob and Jake. Bob and Jake both have 10 hours of time available. They can use their time to do one of 2 things: make pancakes or make hamburgers. Bob can make 2 hamburgers in an hour or 1 pancake in an hour. Jake can make 3 pancakes in an hour and 2 hamburgers in an hour. Use this information to answer the following question: Find the opportunity cost for hamburgers and pancakes for Bob and Jake.Example inspired by Stiglitz & Walsh (2007) Ruby loves dividing her free time between going to the movies and reading. She has 20 hours per week of free time. The length of a film is two hours and it takes an hour to read one chapter of a book. Ruby also has a limited budget to spend on leisure. It amounts to 60€ per week; going to the movies costs 6€ and a book costs 15€. Ruby does not like to read the same book twice. 2. Draw her budget constraint. What is the slope of her budget constraint?
- many countries produce a single good upon which much of their economy depends. That good might be coffee or wool or oil. How might a production possibilities curve help economists in such a country determine how to diversify their economyQ. 1 You are the mayor of a small town with 2000 residents. The head of your economic development agency recently conducted a survey in which the 2000 residents said that a public concert in the centre of town would be worth $20 to cach of them. Since it costs only $5000 to hold the concert, you organized and held the concert, which everyone in town enjoyed. But when you asked for donations to pay for the concert, you only collected $30 in total. What do you know? a. The survey certainly overstated how much the concert was worth to each resident. b. From the standpoint of total costs and benefits, the cost of the concert certainly exceceded the benefit. c. The concert was an example of the Tragedy of the Commons. d. Residents of the town were probably free riders.A fast-food company spends millions of dollars to develop and promote a new hamburger on its menu only to find that consumers won't buy it because they don't like the taste. From an economic perspective, the company should keep the hamburger on the menu because they've spent so much money and time developing and promoting the product. spend more money to develop a more efficient way to cook the hamburger so it cooks in a shorter time. pull the hamburger off the menu and treat the development and promotion expenditures as a sunk cost. keep trying to sell the hamburger so that people who developed and promote it have a job with the company.
- A fast-food company spends millions of dollars to develop and promote a new hamburger on its menu only to find that consumers won't buy it because they dont like the taste. From an economic perspective, the company should keep the hamburger on the menu because they have spent so much money and time developing and promoting the product. spend more money to develop a more efficient way to cook the hamburger so it cooks in a shorter time. pull the hamburger off the menu and treat the development and promotion expenditures as a sunk cost. keep trying to sell the hamburger so that people who developed and promote it have a job with the company.Assume the economy can produce either sports utility vehicles (SUVS) or minivans. The graph below depicts the current production possibilities frontier (PPF). Suppose several new factories are built. Move the end points of the PPF below to show how the PPF changes. Assume that the factory construction affects the economy's ability to produce both minivans and SUVs. Quantity of minivans Quantity of SUVs PPF This is an example of: economic stagnation. economic recession economic contraction. economic growth.Trade You are thinking about buying a house. You find one you like that costs $300,000. You learn that your bank will give you a mortgage for $240,000 and that you would have to use all of your savings to make the down payment of $60,000. You calculate that the mortgage payments, property taxes, insurance, maintenance, and utilities would total $1,440 per month. Which of the following is true regarding your calculation of the cost of owning the house? OA. It should include your monthly income, since you must know the source of the money when trying to calculate costs. B. It should not include maintenance, since homeowners often use their own time to fix things around the house instead of calling a professional. OC. It should include the opportunity cost of the money used to make the down payment. This money could be earning interest in a bank. OD. It should not include property taxes, since that is money that goes directly to the government and is no longer in the market. Given the…