2. Evan goes out drinking every Thursday night, even though he tends to show up late for work and hung over on Friday. d. Why might Evan's friends consider this behavior irrational? e. Why might an economist consider Evan's behavior economically rational? 3. Why do we expect a market-based economy to be closer to allocationy efficient than a command economy? What disadvantages do market economies have compared to command economies? How do most countries respond to the fact that market economies have some advantages over command economies and command economies have some advantages over market economies? 4. Marie has a weekly budget of $24, which she likes to spend on magazines and pies. a. If the price of a magazine is $4 each, what is the maximum number of magazines she could buy in a week? b. If the price of a pie is $12, what is the maximum number of pies she could buy in a week? c. What is Marie's opportunity cost of purchasing a pie? d. At the start of the week, Marie decides to buy a pie. Does this imply that the utility she receives from this pie is greater than or less than her opportunity cost of purchasing the pie? e. Marie is thinking about purchasing a second pie. Do we expect the marginal utility she receives from the second pie to be greater than, less than, or equal to the marginal utility she receives from the first pie? Explain your answer. 5. You just overheard your friend say the following: "Poor countries like Malawi have no absolute advantages. They have poor soil, low investments in formal education and hence low-skill workers, no capital, and no natural resources to speak of. Because they have no advantage, they cannot benefit from trade." How would you respond?6. In Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10 tons of rubber or 40 radios. a. Which country has the absolute advantage in the production of rubber? b. Which country has the absolute advantage in the production of radios? c. Explain your answers to (a) and (b). d. Calculate the opportunity cost of producing 80 additional radios in Japan. e. Calculate the opportunity cost of producing 80 additional radios in Malaysia. 1. Which country has the comparative advantage in producing radios? g. Calculate the opportunity cost of producing 10 additional tons of rubber in Japan. h. Calculate the opportunity cost of producing 10 additional tons of rubber in Malaysia. 1. Which country has the comparative advantage in producing rubber? J. In what product should Japan specialize? In what product should Malaysia specialize? k. If Malaysia wishes to trade 10 tons of rubber with Japan in exchange for radios, what is the lowest number of radios it should ask for in order to benefit from trade? 1. What is the largest number of radios Japan can offer in order to benefit from trade