ECON 1901 - Principles of Microeconomics

1. Read some current news stories on sites such as www.cbc.ca, www.bbc.com, and www.theglobeandmail.com. Find one article on a microeconomic topic and one article on a macroeconomic topic. For each article, provide the link to the article and explain in your own words what makes each article about a microeconomics or macroeconomics topic. (4 marks)
2. Marc can write 10 reports or provide service to 2 customers in an hour. Mia can write 4 reports or provide service to 0.5 customers in an hour. (4 marks)
   1. What is Marc’s opportunity cost of looking after 1 customer?
   2. What is Mia’s opportunity cost of writing 1 report?
3. The following table shows production possibilities for Li and Raj.

   Li’s Production Per Day		Raj’s Production Per Day
   Cupcakes	Muffins	Cupcakes	Muffins
   0	12	0	16
   1	9	1	12
   2	6	2	8
   3	3	3	4
   4	0	4	0

   1. Fill in the table below as follows (10 marks):
      • The first 2 columns represent joint production where Li and Raj produce equal quantities.
      • The last 2 columns represent joint production where they each produce according to their comparative advantage (specialization).

   Combined PPF (Equal Quantities)		Combined PPF (Specialization)
   Cupcakes	Muffins	Cupcakes	Muffins
   0		0
   2		2
   4		4
   6		6
   8		8

   1. Plot the combined production possibility curves for both cases (equal quantities & specialization), with cupcakes on the horizontal axis, on the same graph). (10 marks)

Note

An Assignment 1 Table Template is provided for the completion of Question 3a.