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ECO111 - Test 01 - Individual Assignment 01 - BL5 - Fall2024

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13 views2 pages

ECO111 - Test 01 - Individual Assignment 01 - BL5 - Fall2024

Uploaded by

huongchi011205
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ECO111 Microeconomics

Class:
Handed out:
Submission due:
Format:
Submission mode:
Email to:

Student Information
Name: Roll number:
Room No: Class:

FOR TEACHER ONLY


MARK MARKED BY Signature of Proctor
(NAME AND SIGNATURE)

Individual Assignment 01
Question 1. (2 points)

1. What is your opportunity cost of each of the following?


a. Attending your next economics class meeting.
b. Skipping your next economics class meeting.
c. Taking an all expenses paid trip to the Lasvegas for a week during this semester.

2. The local pizza restaurant is advertising a special. If you buy one individual sized pizza,
you get the next one at 25% off, the third one for 50% off and the fourth one for 75% off.
Your marginal benefit from eating pizza is shown in the table below. If the price of a pizza
is $6, how many should you buy? (3 points)

No of pizzas MB (Marginal Benefit) MC (Marginal Cost)


0 0 0
1 7 ?
2 4 ?
3 2 ?
4 1 ?
3. The workers in a factory currently earn $120 for a 39 – hour week. The management
offers them a choice between either a straight 10% wage increase or an increase in the
weekly wage to $125 coupled with a reduction in hours from 39 to 37 hours. What is the
opportunity cost to each worker of opting for the 37 – hour week?

Question 2. (5 points)

1. a. What is defined as absolute advantage?


b. What is defined as comparative advantage?
c. Case 1: Output approach
Two commodities and two countries
Given the resources, Singapore and Malaysia can produce the following products –
television sets and cars (see Table 01)
Countries TV sets Cars (units)
Singapore 100 50
Malaysia 60 40
Table 01
+ Which country has the absolute advantage in the production of both TV sets and
Cars over the other? Explain
+ Which country has the comparative advantage either in the production of TV sets
or in the production of Cars over the other? Explain and Draw your PPF to
illustrate
d. Case 2: Input approach
Two commodities and two countries
Give the resources, America and England can produce one unit for both Steel and
Coal in terms of number of working hours shown as follows:
Countries One unit of Steel One unit of Coal
required required
America 80 man-hours 90 man-hours
England 120 man-hours 100 man-hours
Table 02
+ Which country should specialize in the production of Steel? Explain your
answer and Draw your PPF to illustrate
+ Which country should specialize in the production of Coal? Explain your
answer and Draw your PPF to illustrate
e. Case 3: Input approach
Two countries but multiple commodities
The following Table 03 shows the numbers of man – days taken to produce an
equivalent amount of six commodities in each of the two countries – Switzerland
and Sweden.
Countries Coal Cotton Wool Iron Wheat Maize
Switzerland 120 60 70 100 140 80
Sweden 100 25 35 90 90 20

Table 03

+ Assuming that there are no other costs of production. Which two commodities is
Sweden most likely to import from Switzerland? Calculate and Explain

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