Economics-Q38 Online Services


This assignment is a group assignment of 2 or 3 students. The group must present one paper with their names on it. An assignment is either handwritten clearly in black or blue ink or typed. Any graphs included in the assignment (if any) must be hand drawn not done by computers. You may draw graphs using pencils only Due Date to submit assignment is Sunday, Oct 22, 2017 @10:00 am. You may submit assignment (hard copy) to Ms. Dunia inside class or office @10:00 am latest.

Answer the following questions
1) Classify which of the following topics are relating to Microeconomics or Macroeconomics and explain why: ( 3 points)
a. The decrease in prices of land in the United States was 6% from September to December 2015
b. An unexpected earthquake in a country destroyed the economy’s overall production of goods and services and caused the prices to rise.
c. Due to low demand on the purchase of cars, a number of car factories decided to lay off (fire from work) between 15%-25% of its workers.
2) Classify each of the following statements as Positive or Normative economic statements. Explain why? ( 3 points)
a. The production of all goods and services increased by 10% from 2013-2014.
b. Prices of oil in world markets are too low these days.
c. Health spending (that is government spending on public hospitals) should be reduced by $50 billion to allow the government to spend more on public schools and defense spending inside the country.

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3) Consider an efficient production possibilities table for the following goods
Production Alternatives Automobiles Rockets
A 0 60
B 4 45
C 8 30
D 12 15
E 16 0
(Automobiles in thousands of pieces/ Rockets in hundreds of pieces)
a. Show these data graphically. (Please locate automobiles data on the x-axis and rockets data on the y-axis).
Please draw PPF manually not on computer. (0.5 point)
b. If the economy is at point D and decided to move to point C. If to consider the rockets and automobiles production levels between these two points, what is the opportunity cost incurred by this economy when the economy decided to move from point D to point C? ( 1 point)
c. On the same graph of part (a) above, show a point (X) that is impossible for the economy to achieve? ( 0.5 points)
d. On the same graph of part (a) above, show a point (Y) that is attainable or feasible but inefficient? ( 0.5 points)
4) Give 2 major reasons (or benefits) of why do economists use and consider “Making Assumptions” as one of the important economic methodologies in economics? What is the major limitation (disadvantage) of using “making assumptions” as an economic methodology in this field? (1.5 points)
Product Code-Economics-Q38

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