Practice Problems Day!

You will present your partner (the person in front of you) with your two problems, they will work it out with your help, then vice-versa Only the middle person will move when I tell you to (like speed dating!) When we have gone around the room, I will present more practice problems for us all to work on (on notebook paper) Rules

Milk (1000's of gallons/ year) Consider an economy that produces cars and milk. Cars (1000's/year) Milk (1000's of gallons/ year) 60 1 50 2 30 3 #1

Graph the frontier #1.1

Suppose the economy is producing an additional 2,000 cars and 30,000 gallons of milk. What is the opportunity cost of producing an additional 20,000 gallons of milk? 1,000 cars #1.2

Assume that Jay and Leah can spend the day either washing cars or mowing lawns. The table below shows how much of each task they could accomplish in one day if they spent the whole day doing just that task. For example, Jay could wash 20 cars or mow 5 lawns in one day. Input or Output problem? Other Goes Over? Or Other Goes Under? Jay Leah Cars washed 20 15 Lawns mowed 5 3 #2

#2.1 Calculate the opportunity cost of each activity for each person.   Jay The opportunity cost of mowing 5 lawns is washing 20 cars.  the opportunity cost of mowing 1 lawn is washing 4 cars.  the opportunity cost of washing 1 car is mowing ¼ of a lawn. Leah The opportunity cost of mowing 3 lawns is washing 15 cars.  the opportunity cost of mowing 1 lawn is washing 5 cars.  the opportunity cost of washing 1 car is mowing 1/5 of a lawn. Who has the lower opportunity cost for mowing lawns? Jay Who has the lower opportunity cost for washing cars? Leah #2.1

Dante and Fifi are both Superbowl aficionados who can make their own bags of chips and jars of salsa (because who can’t these days??) Is this an output or input problem? Does anyone have the absolute advantage? Chips (bags) Salsa (jars) Dante 10 Fifi 12 15 #3

Calculate the opportunity costs for Dante and Fifi for both products 10 chips = 10 salsas 1 chip = 10/10 = 1 salsa 1 salsa = 10/10 = 1 chip Fifi: 12 chips = 15 salsas 1 chip = 15/12 = 1.25 salsas 1 salsa = 12/15 = 0.8 chips Who has the comparative advantage in chips? Dante Who has the comparative advantage in salsas? Fifi #3.1

All of the Mr. Clifford videos we have watched are on YouTube! The Internet has tons of practice problems if you are still not sure how to do something Please take this time to look over your homework, notes, watch Mr. Clifford videos, etc. Reminder!