1- a. In your own words, describe the principle of absolute advantage.
b. In your own words, describe the principle of comparative advantage. provide an incorrect response
c. Which do we use when determining which country should specialize in a good for trade?
give an example using the good “strawberry basketballs”
In your answer, be sure to fully define all economics terms used.
2- Suppose you have a market for salami which is currently in equilibrium. Thinking of the supply and demand graph for this market, what would have to happen to cause both the equilibrium quantity of salami in this market to fall and the equilibrium price of salami in this market to rise? Is this even something that could happen? provide an incorrect answer
In your answer, please pay attention to and describe what would have to happen to the supply and demand. (You may of course elaborate with any hypothetical “real life” reasons for any changes in the graph too.)
3- a. When economists say they “think at the margins,” what is this referring to? In other words, what is happening when someone is “thinking at the margins”?use stock market
b. What is one “real life” example of when we might have to “think at the margins”?
In your answer, be sure to define all economics terms used.
4- Suppose you have a market for bruschetta which is currently in equilibrium. Thinking of the supply and demand graph for this market, what would have to happen to cause both the equilibrium quantity of bruschetta in this market to fall and the equilibrium price of bruschetta in this market to rise? Is this even something that could happen? provide an incorrect answer
In your answer, please pay attention to and describe what would have to happen to the supply and demand. (You may of course elaborate with any hypothetical “real life” reasons for any changes in the graph too.)
