Assignment 1

Question 1) What is Economics? Also explain the Production Possibilities Model. Question 2) Answer the questions based on the figure below, which is for the country of Quantz. (5 Marks) Production Possibilities for Coffee and Tea 280 U 240 V W 200 160 X Quantity of Coffee 120 80 40 Z 80 160 240 320 How much tea is gained and what is the cost in coffee? a. In moving from U to VI tea is gained at the cost of coffee. b. In moving from W to X tea is gained at the cost of coffee. c. In moving from Y to ZI tea is gained at the cost of coffee