A draw the countrys production possibility frontier b whats

Question

Homework I                                                               Name:        

Econ 260.3                                  

Spring 2016

Manjuri Talukdar    

1. A country has the following production possibility schedule:

Tank Production                            Wheat Production

(Number per year)                           (Bushels per year)

  0                                                      1,000,000

1,000                                                   950,000

2,000                                                   850,000

3,000                                                   700,000

4,000                                                   400,000

5,000                                                   0

 

a. Draw the country's production possibility frontier

b. What's happening to the opportunity cost of wheat as the country produces more and more wheat

c. What is the opportunity cost of increasing tank output from 3,000 units to 4,000 units

d. Say the country's resources become equally specialized at producing both wheat and tanks.  What will happen to its production possibility curve

2.         Monthly Rent              Quantity Demanded                 Quantity Supplied

                                                    (Thousands)                               (Thousands)

               $800                                   30                                                10

               $1,000                                25                                                14

               $1,200                                22                                                17

               $1,400                                19                                                19

               $1,600                                17                                                21

               $1,800                                15                                                22 

 

1. Graph the demand and supply curves
2. Find the equilibrium price and quantity

1. Suppose a tornado destroys a significant number of apartment buildings, but doesn't affect people's desire to live there.  Illustrate on your graph the effects on equilibrium price and quantity and write your explanation here

3.  You're given 2 equations:  (1) Q = 100 - 5P;   (2) Q = 50 + 5P;

a)      Identify which equation represents the demand curve and which represents the supply curve

b)      Solve for equilibrium price and equilibrium quantity