1. The following is a production possibilities schedule for prisons and public education. Alternative Prisons Public Education 160 0 120 20 80 40 40 60 0 80 Graph the production possibilities curve. Then discuss the following: a. What is the opportunity cost of the first 20 units of public education? Of the last 20 units (from 60 to 80) of education? . Add point F (40 units of education, 60 units of prisons). What does it represent? c. Why cannot the economy produce 60 units of education and 80 units of prisons? d. If the economy grows and the curve shifts out in the future, could the economy produce 60 units of public education and 80 units of prisons? What might cause the economy to grow? 2. The following are the demand and supply schedules for peaches during one week. Graph them and discuss the equilibrium price and quantity. Quantity Quantity Price Supplied Demanded $6 2,000 1,200 5 NWA 1,800 1,400 1,600 1,600 1,400 1,800 1,200 2,000 a. What would be the result if price were temporarily $5? $2? b. Now show an increase in demand by 200 quantity units at each price. What might cause such a change? Show on the schedule and on the graph. What is the new equilibrium? 3. Discuss a good that has a spillover benefit, such as education or immunizations. 4. What is a public good? Do people differ as to what they consider public goods? Do these goods actually have to be produced by the government? 5. Discuss the factors that cause demand and supply curves to shift. 6. What do economists mean when they say, "There is no free lunch"