1. Collen and Bill are living in an island without any connection possibility to the rest of the world. Image Collen have absolute advantage to gathering food (10 logs wood per day) and wood (10 bushels food per day). And Bill have only comparative advantage for gathering food. Also Bill can produce a day 4 logs wood or 8 bushels food.

1. Calculate each of ones monthly production with no trade
2. Calculate each of ones monthly production after specialization
3. Draw Colleens production possibilities (monthly output)
4. Draw also Bills production possibilities (monthly output)
5. Draw Colleens and Bills how both are able to go beyond their original production possibilities frontier.

1. Describe the circular flow of economic activates by drawing a diagram and describe how firms and households meet in output and inputs markets.

1. How would you draw a supply and demand curve for the Leonardo da Vincis painting, the Mona Lisa? What is the main determinant of the market of rare goods? Why?

1. Whats is elasticity? Calculate price elasticity via following variables

Q1:5 P1:3

Q2. 10 P2: 2

1. One of the scarce resources that constrain our behavior is time. Each of us has only 24 hours in a day. How do you go about allocating your time in a given day among competing alternatives? How do you go about weighing the alternatives? Once you choose a most important use of time, why do you not spend all your time on it? Use the notion of opportunity cost in your answer.

1. For each of the following, describe some of the potential opportunity costs:

a. Studying for your economics test

b. Spending 2 hours playing computer games

c. Buying a new car instead of keeping the old one

d. A local community voting to raise property taxes to increase school expenditures and to reduce class size

e. A number of countries working together to build a space station

f. Going to graduate school

1. Which of the following statements are examples of positive economic analysis? Which are examples of normative analysis? a. The inheritance tax should be repealed because it is unfair. b. Allowing Chile to join NAFTA would cause wine prices in the United States to drop. c. The first priorities of the new regime in the Democratic Republic of Congo (DRC, formerly Zaire) should be to rebuild schools and highways and to provide basic health care.

1. Explain flowing terms with your own sentences: marginal cost, opportunity cost, efficiency, stability, production possibility frontier, economic growth, laissez-faire, inferior goods, substitutes goods, complementary goods, black market, price floors, price ceiling, consumer surplus, producer surplus, invisible hand.

1. Demand curve is downward and supply curve is upward. Demonstrate each of this situation by drawing a graphic for demand and another graphic for showing the supply curve.

1. Illustrate following production possibilities for capital goods and consumer goods by drawing a production possibilitys frontier graphic, where;
2. A point shows the inefficient production
3. A point shows where production would be impossible
4. 3 points that showing different opportunity costs on production possibilities frontier-ppf.

1. Explain the circular flow of economic activates by drawing a diagram and describe how firms and households meet in output and inputs markets.
2. Demonstrate following table on a graphic and give reasons for shifting to right.

Price (Per Call)	Quantity at an monthly income of 300 4 $	Quantity at an monthly income of 600 4 $
0	30	35
0.5	25	33
3.5	7	18
7	3	12
10	1	7
15	0	2
20	0	0

1. Draw graphics to demonstrate the demand shifts for following cases:
2. How demand for interior goods and normal goods will change when income rises
3. Assume that chicken is substitute good for hamburger, if price of hamburger rises how the demand of chicken and hamburger will change, demand for which one will rise and for the other will fall?
4. How the demand for catsup as a complementary good to hamburger will change, shifting to left or to right, why?

1. Illustrate the demand curve of households A, B, C according to data of below given table and draw a total market demand curve by adding the demands of all 3 households together. (You need to draw 4 different graphics).

Price	A (quantity demanded)	B	C	A+B+C
3.5	4	0	4	8
1.5	8	3	9	20

1. Show following table of supply on a graphic.

Price	Quantity
1.5	0
1.75	10,000
2.25	20,000
3	30,000
4	45,000
5	45,000

1. Using new seeds makes it possible to produce more. Accordingly, the shift of supply curve to right by applying data of below given table:

Price	Quantity (old seed)	Quantity new seed
1.5	0	5,000
1.75	10,000	23,000
2.25	20,000	33,000
3	30,000	40,000
4	45,000	54,000
5	45,000	54,000

1. Illustrate the supply curve of firms A, B, C according to data of below given table and draw a total market supply curve by adding the supplys of all 3 firms together. (You need to draw 4 different graphics).

Price	A (quantity supplied)	B	C	A+B+C
3	30,000	10,000	25,000	65,000
1.75	10,000	5,000	10,000	25,000

1. What does excess demand mean and draw a graphic to illustrate that.
2. What does excess supply mean and draw a graphic to illustrate that.
3. Demonstrate the shifts of supply curves:
4. When there is an increase in the cost of production
5. When there is a decrease in the cost of production