Homework Set 1
Principles of Economics
Date: Question #1: List some constraints on our labor force that prevent our fully using our
plant and equipment 24 hours a day, seven days a week
3 Question #2: When we are efficiently allocating our resources and using the best
available technology, we are operating on our _________________________.
Answer: Question #3: Economic growth can be attained by:
2 Question #4: Full employment implies an unemployment rate of about ____________
Answer: Question #5: The law of increasing costs states that, as the output of one good
Answer: Question #6a: If we were at point C, could we quickly produce substantially more
houses and more cars?
Answer: Question #6b: If we were at point M, could we quickly produce substantially more
houses andmore cars?
Answer: Question #6c: If we were at point C, could we quickly go to point J?
Answer: Question #7: Fill in the following points:
Point X: where our economy generally operates
Point Y: a serious recession
Point Z: a catastrophic depression
Point W: economic growth
Answer: Question #8: Use the following illustration to answer the questions below:
a. What is the opportunity cost of going from point B to point C?
b. What is the opportunity cost of going from point D to point C?
c. What is the opportunity cost of gong from point B to point A?
d. What is the opportunity cost of going from point C to point D?
d. Question #9: The basis for international trade is _____________________________________.
Answer: ______________. Question #10: Brazil is better at producing ______________________________
than at producing_______________________________________.
Argentina is better at producing _____________________________
than at producing _______________________________________. Answers: ___________ Question #11: If one (1) ton of steel could be traded for one (1) ton of wheat, Brazil
would trade its _____________________________________ for Argentina’s
Answers: Question #11: Bolivia has a comparative advantage in the production of which type of metal?
Answer: h type of metal? Question #13: Chile has a comparative advantage in the production of which, type of metal?
Answer: , type of metal? Question #14: Bolivia will trade ____________________________ for _____________________ Answers: _________________________. Question #15: Chile will trade __________________________________ for