Assignment:
Each question should be in at least 200 words. Each question carries 10 points. Please include graphs and / examples wherever necessary
1) Define and illustrate production possibilities frontier and its importance. Are the following situations /shapes of production possibilities frontier possible? Illustrate with examples
a) Constant opportunity cost situation
b) Increasing opportunity cost situation
c) Decreasing opportunity cost situation
2) Discuss cost-benefit analysis. What are the benefits of crime prevention? What are the costs? Are all the costs and benefits easily measurable? What should we do when costs and benefits are not quantifiable? Should we base all our decisions on cost-benefit analysis?
3) Discuss the progress and failures of some of the global policies on environment.
4) How does demand inelasticity affect farm prices and farmers' incomes? How does this issue compare between U.S. agricultural production and primary commodity production in developing countries.
5) Explain in detail all the public assistance programs
6) How do tariffs and import quotas harm the consumer? How do they harm the US worker?
7) Why the understatement of unemployment statistics a problem? Why is overstatement of inflation statistics a problem?
8) Conservatives favor a lesser role for government in the economy, whereas liberals favor a greater role. How would each of these groups feel about a fiscal policy that increases government purchases and income transfers? Fiscal policy that reduces taxes? Monetary policy that reduces interest rates? Use appropriate graphs.