Discussion questions | Economics homework help
Answer the following questions:
1. Lawns produce no crops but occupy more land (25 million acres) in the United States than any single crop, such as corn. This means that the United States is operating inefficiently and hence is at a point inside the production possibility curve. Right? If not, what does it mean?
2. Suppose the United States and Japan have the following production possibility tables:
Japan
United States
Bolts of Cloth
Tons of Wheat
Bolts of Cloth
Tons of Wheat
1,000
0
500
0
800
100
400
200
600
200
300
400
400
300
200
600
200
400
100
800
0
500
0
1,000
a. In what good does the United States have a comparative advantage?
b. Is there a possible trade that benefits both countries?
3. Write the definition for each of the following:
a. Law of Demand
b. Law of Supply
4. Which of the attached graphs best demonstrates the law of demand?
I
II
III
IV
5. Which of the attached graphs best demonstrates the law of supply?
I
II
III
IV