Question 1-
Assume you are running a business and you have 4 employees - they are two tasks that you can have them work on - either analyzing data that you have collected; or writing a summary of the data for presentation to your bosses.
|
|
Analysis
|
Summary
|
|
Anna
|
9
|
9
|
|
Brock
|
5
|
6
|
|
Christine
Davis
|
7
7
|
3
10
|
Analysis is number of data files analyzed per day. Summary is number of data files summarized per day.
1. Which employee has the comparative advantage in data analysis?
a) Anna
b) Brock
c) Christine
d) Davis
e) No one
2. Which employee has the comparative advantage in summary writing?
a) Anna
b) Brock
c) Christine
d) Davis
e) No one
3. Assuming that you are able to assign each worker tasks that take advantage of their comparative advantages - further assume that your bosses only care about data files that are both analyzed and summarized. How many data files can you both analyze and summarize in one day? (Fractional answers are acceptable.)
4. If Brock is injured and can no longer summarize any data files - but he still can analyze 5 per day - how many data files can you both analyze and summarize in one day? (Fractional answers are acceptable.)
Question 2-
Consider the market for ivory:
Demand Curve: QD = 100 - 5P
Supply Curve: QS = 2P - 12
*Note: quantity is in pounds, price is in dollars.
5. What is the equilibrium price?
6. What is the equilibrium quantity?
7. If the price was $7, what would be the quantity demanded?
8. Assume a TV show popularizes ivory since many beautiful female cast members are wearing ivory. This causes the demand to rise by 28 pounds at any given price. (So the demand curve is now QD = 128 - 5P) After time passes, the market reaches a new equilibrium - what is the new equilibrium price in the market?