ManIP U-VICI MADE IN CHAIR K DID DC esc N F5 F6 =10 F1 F12 @ N 6 O 11 + tab pic 1.4 Demand Practice | ReviewEcon.com 1. Demand curves are downward sloping because there is a(n) relationship between and 2. How does a change in price impact quantity demanded? Increased Price: Decreased Price: 3. What are the determinants of demand (Demand shifters)? 4. Take a look at the events in the table below. Place an "X" in the appropriate column depending on if the event would cause demand for the underlined product to shift right, shift left, cause movement up the curve, or cause movement down the curve. Shift Right Shift Left Movement Movement (Increase) (Decrease) Up Along Down Along the Curve the Curve ReviewEcon jeans become very popular because sports figures begin wearing them Consumers incomes rise and canned soup is an inferior good Gasoline gets cheaper The price of video game consoles increases having this impact on video games An increase in the birth rate has this impact on diapers How would an increase in the price of jelly impact jam. Consumers expect the price of TV's to go down next month. A meat shortage causes the price of steak to increase.X P N M shift fn come pic 1.3 Comparative Adv. and Trade Practice 1 ReviewEcon.com part 1: The basics 1. Define absolute advantage: 2. Define comparative advantage: 3. Identify with an "X" whether the underlined item is an input or an output. Input Output The number of hours it takes to produce one hula hoop The tons of coffee that can be produced on an acre of land The quantity of industrial robots needed to produce 100 cars a day cres it takes to produce 10 bushels of wheat The number of bicycles a country can produce with fixed resources The amount of paper that can be produced in a papermill each day 4. What is the formula for calculating opportunity costs for the production of a good if outputs are given? 5. What is the formula for calculating opportunity costs for the production of a good if inputs are given? Part 2: Answer the questions based on the table below. The numbers indicate how many hours of labor it takes for each country to produce 1 chair or 1 door. Chairs Doors Country A 10 hours 50 hours Country B 40 hours 60 hours 1. Which country has the absolute advantage in the production of Chairs? Explain. 2. Calculate the opportunity cost of chairs and doors for Country A. Show your work. Opportunity cost of 1 chair is doors Opportunity cost of 1 door is chairsT V W S G A H return s lock 3. Calculate the opportunity cost of chairs and doors for country B. Show your work. doors shift Opportunity cost of 1 chair is chairs Opportunity cost of 1 door is 4. Which country has the comparative advantage in the production of Chairs? Explain. and 5. For mutually beneficial terms of trade, 1 chair will be worth between doors. Part 3: Answer the questions based on the production possibilities curves for Brazil and Peru in regards indicating their ability to produce tons of coffee soybeans and tons of coffee each month. Brazil Peru 240 200 Coffee Coffee 80 Soybeans 40 Soybeans 6. Which country has the absolute advantage in the production of soybeans? Explain. 7. Calculate the opportunity cost of soybeans and coffee for Brazil. Show your work. Opportunity cost of 1 ton of soybeans is ton(s) of coffee Opportunity cost of 1 ton of coffee is ton(s) of soybeans 8. Calculate the opportunity cost of soybeans and coffee for Peru. Show your work. Opportunity cost of 1 ton of soybeans is ton(s) of coffee Opportunity cost of 1 ton of coffee is ton(s) of soybeans 9. Which country has the comparative advantage in the production of soybeans? Explain. 10. For mutually beneficial terms of trade, 1 soybean will be worth and between ton(s) of coffee.X N M shift fn control option command command option 5. Explain the difference between these two production possibilities curves. What type of opportunity costs are shown here? Good A What does the shape say about the resources used in the production of these goods? Good B What type of opportunity costs are shown here? Good A What does the shape say about the resources used in the production of these goods? Good B
