Identify which country has the compa

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1. Identify which country has the comparative advantage (page 26) for cheese & which country has the comparative advantage for crackers in the following example. (2 points) Show your work.

CHEESE CRACKERS
ENGLAND 6 12
FRANCE 4 6
France has the comparative advantage for making cheese.
2. Identify which of the statements apply to microeconomics and which to macroeconomics (page 4) and WHY?: (6 points)

a. The consumer price index fell by 2.5 percent in 2016.
b. The Macon Software Company hired 15 employees last month.
c. An unexpected freeze in Georgia affected the pecan crop and caused the price of Georgia pecans to rise.
d. Last week the Eastman Credit Union lowered its interest rate on business loans by .5% .
e. Total US output, adjusted for inflation, fell by 2.5 percent in 2016.
f. The unemployment rate in the US was 2.5 percent in December 2016.
a.Macro b.Micro c.Micro d.Macro e.Macro f.Macro
3. Yippee! You won $100 on a lotto ticket at the local Piggly Wiggly and decided to spend all the winnings on LARA bars and Red Bull. The price of a LARA bar is $2.50 and the price of a Red Bull is $5.00. (5 points)

a. Make a simple table showing the combinations of the alternatives that are available. Keep things whole, please. (see the table in question 4 below.) Make sure each combination totals exactly $100.
b. Graph the data in your table. What is the slope (pages 16-17) of the budget line? (show your calculation)
c. At any point, what is the opportunity cost (page 30) of one more LARA bar? Of one more Red Bull?
d. How would you decide which combination of LARA bars and Red Bulls to buy?

4. Below is a production possibilities table for rotary saws & mitre saws: (5 points)
Production Alternatives
TYPE OF PRODUCTION A B C D E F
Rotary Saws 0 5 10 15 20 25
Mitre Saws 30 24 18 12 6 0

a. Using this data, with Rotary Saws on the Y-axis, draw a production possibilities curve.
b. If this economy is at point B, what is the opportunity cost of one more rotary saw? Of one more mitre saw?
c. If this economy were producing 10 rotary saws and 20 mitre saws, what could you conclude about how it’s using its available resources?
d. If this economy were producing 10 rotary saws and 15 mitre saws, what could you conclude about how it’s using its available resources?

5. On way to illustrate that an economic arrangement is inefficient is to show how, through some rearrangement, some people could gain with no else losing. Use this approach to evaluate the following situation: (2 points)

A $200-per-hour lawyer is at the end of the a 2-hour waiting line at the DMV, and a college student home for spring break is at the front of the line.

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