Assignment:
Please answer to the following five questions. Each question has four choices, and you should select one of the choices.
1. A firm in NSW grows onions, and sells them at the Sydney market for $4 per kilogram. By adding compost to the firm, owner of the firm can increase his yield as shown in the following table. If compost costs $10 per bag and goal of the owner is to make as much profit as possible, how many bags of compost should you add?
Bags of Compost Kilograms of Onions
0 100
1 110
2 115
3 118
4 120
5 121
6 121
2 bags A
3 bags B
5 bags C
6 bags D
2. In a computer repairing shop, Tom can repair 10 computers per day or respond to 15 clients by phone per day. Jerry can repair 5 computers per day or respond to 20 clients by phone per day. Who has an absolute advantage in responding to clients? What is Tom's opportunity cost of repairing a computer? Who has a comparative advantage in repairing computers?
Jerry, 2, Tom A
Jerry, 1, Jerry B
Jerry, 1.5, Tom C
Tom, 1.5, Jerry D
3. In the computer repairing shop example, assume that there is only Tom as a worker in economy. He allocates his time between repairing computers and responding to clients by phone. Each hour he devotes to repairing computer yields 5 computers, and each hour she devotes to responding clients yields 10 responds. The number of Tom's working hours is 8 hours per day. Use simple algebra, what is the equation of Tom's production possibilities curve (PPC)?
Note: D denotes the number of computers repaired per day and B denotes the number of responds to clients by phone per day
?? = 40 - 0.5?? A
?? = 40 + 0.5?? B
?? = 40 + 0.1?? C
?? = 40 - 0.1?? D
4. Explain whether the following pairs of goods are complements or substitutes?
i. Beef and chicken
ii. Coffee and coffee milk
iii. Chocolate and chocolate milk
iv. Public university and private university
i. Substitute
ii. Complements
iii. Complements
iv. Complements A
i. Substitute
ii. Substitute
iii. Complements
iv. Substitute B
i. Substitute
ii. Complements
iii. Complements
iv. Substitute C
i. Substitute
ii. Complements
iii. Substitute
iv. Complements D
5. Use supply and demand analysis to predict what will happen to the equilibrium price and quantity of car if Australian government halves road tax for each car and mechanizes all steps of the production of a car in Australian car production factories?
i. Decrease
ii. Decrease A
i. Increase
ii. Decrease B
i. Decrease
ii. Increase C
i. Increase
ii. Increase D