ECON 2302

HOMEWORK PROBLEMS

FOR PART 1

 

The purpose of doing these problems is to increase your understanding of the material. It will help you on quizzes and exams. You do not have to turn in this work. I will not go over these problems specifically in class. Read the assigned chapters and come to class. Check on the completed work which is on reserve in the SCC library. After doing that, if you still have difficulties, come to see me during my office hours.

                                                                                                ---- Dr. Cohick

 

1. Scarcity is a basic concept in economics. In your own words, describe what scarcity means: _______________________________________________________________

_____________________________________________________________________
_____________________________________________________________________

_____________________________________________________________________

 

2. Jim is considering going to college. From the factors identified in the first column below, some affect the benefits and some affect the costs of going to college. Each factor may increase or decrease Jim’s likelihood of going to college. Identify the benefits in column two and the costs in column three. Put “increase” or “decrease” in column four.

 

(1) Factor

(2) Benefits of attending college

(3) Costs of attending college

(4) Increase or decrease

the chance

of Jim going to college?

If Jim doesn’t go to college, he gets a raise from $10/hr to $20/hr

 

 

 

All of Jim’s friends are going to college and he likes being around his friends.

 

 

 

The salary gap between college graduates and HS grads is increasing.

 

 

 

Jim hates to study.

 

 

 

 

The college Jim would go to has just started a low-cost commuter bus from his neighborhood to campus.

 

 

 

A “bad” economy has eliminated many jobs ordinarily open to HS grads.

 

 

 

 

 

3. What would be YOUR opportunity cost of participating in the activity listed below?

Activity

Your opportunity cost

Study one more hour each night.

 

Take a week long trip.

 

Sit in the back instead of up front in class.

 

Respond to questions in class.

 

Spend three hours getting a medical checkup.

 

Surf the Web an extra hour each night.

 

 

4. Use the data below to draw a PPF for grades. Put sociology grades on the vertical axis and economics grades on the horizontal axis. Then answer the following questions:

            (a) What is the limited resource? ______

            (b) What is the opportunity cost of getting an 81 instead of a 72 on your sociology exam? _________________________________

            (c) What must be done to get a 90 on both exams? ____________________________

            (d) What grades would you get if you only studied two hours each for these two exams? ________________________________

 

Hrs studying for SOC

SOC Grade

Hrs studying for ECON

ECON Grade

6

90

0

27

5

87

1

45

4

81

2

60

3

72

3

72

2

60

4

81

1

45

5

87

0

27

6

90

 

5. A country could be at either point A or point B on its PPF for consumer goods and capital goods.

            (1) Draw the PPF and identify points A and B.

            (2) Describe the trade-off that occurs when the

Country switches from point A to point B. _________

____________________________________________

____________________________________________