Week #1 Assignment (click here to submit) After reading chapters 1, and 2 as indicated, do the follo

Week #1 Assignment (click here to submit)

After reading chapters 1, and 2 as indicated, do the following exercises:

Chapter 1:

1 To which category of resources does each of the following belong?

a A taxi

b Computer software

c One hour of legal counsel

d A parking lot

e A forest

f The Mississippi River

g An individual introducing a new way to market products on the Internet

2 If behavior is governed by rational self-interest, why do people make charitable contributions of time and money?

Chapter 2:

3 Discuss the ways in which the following conditions might affect the opportunity cost of going to a movie tonight:

a You have a final exam tomorrow

b School will be out for one month starting tomorrow

c The same movie will be on TV next week

d The Superbowl is on TV

4 You can either spend spring break working at home for $100 per day for five days or go to Florida for the week If you stay home, your expenses will total about $120 If you go to Florida, the airfare, hotel, food and miscellaneous expenses will total about $1,000 What’s your opportunity cost of going to Florida?

5 You have the following information concerning the production of wheat and cloth in the United States and the United Kingdom:

Labor Hours Required to Produce One Unit

United Kingdom United States

Wheat 2 1

Cloth 6 5

a What is the opportunity cost of producing a unit of wheat in the United Kingdom? In the United States?

b Which country has an absolute advantage in producing wheat? In producing cloth?

c Which country has a comparative advantage in producing wheat? In producing cloth?

e Which country should specialize in producing wheat? In producing cloth?

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