1.5 Briefly describe the trade-offs involved in each of the following decisions. List some of the opportunity costs associated with each decision, paying particular attention to the trade-offs between present and future consumption.

a. After graduating from university, Victor decides to take a gap year instead of getting a graduate job.

b. Alia decides to practice math every day and take tuitions.

c. Mary takes her dog to the pet shop every week for grooming even though it takes 2 hours of her time and costs £45 for each session.

d. Shanchai is in a hurry to catch her flight. She drives over the posted speed limit on her way to the airport. * 1.6 The countries of Orion and Scorpius are small mountainous nations. Both produce granite and blueberries. Each nation has a labor force of 800. The following table gives production per month for each worker in each country. Assume productivity is constant and identical for each worker in each country. Tons of Granite Bushels of Blueberries Orion workers 6 18 Scorpius workers 3 12 Productivity of one worker for one month

a. Which country has an absolute advantage in the production of granite? Which country has an absolute advantage in the production of blueberries?

b. Which country has a comparative advantage in the production of granite? of blueberries?

c. Sketch the ppf’s for both countries.

d. Assuming no trading between the two, if both countries wanted to have equal numbers of tons of granite and bushels of blueberries, how would they allocate workers to the two sectors?

e. Show that specialization and trade can move both countries beyond their ppf’s