1.  Economic problem  Limited Income  Unlimited Wants Chapter 1, LO51©2013 McGraw-Hill Ryerson Ltd.

2. Chapter 1, LO52 [T1] Ed: Place Brazil ahead of Mexico[T1] [T2] Ed: Place Pakistan ahead of Nigeria[T2] CountryPer Capita Income, 2010 (U.S. dollars, based on exchange rates) Switzerland70,350 United States47,140 Canada41,950 France42,390 Japan42,150 South Korea19,890 Brazil9,390 Mexico9,330 China7,560 Pakistan2,780 Nigeria2,160 Rwanda1,180 Liberia 330

3. LO4 1-3  A budget line  Attainable and unattainable options  Tradeoffs and opportunity costs  Make the best choice possible  Change in income ©2013 McGraw-Hill Ryerson Ltd.3 Chapter 1, LO5

4. LO4 1-4  Scarce Resources  Land  Capital  Human Resources  Labour  Entrepreneurial Ability ▪ takes initiative ▪ makes policy decisions ▪ innovates ▪ bears risk ©2013 McGraw-Hill Ryerson Ltd.4 Chapter 1, LO5

5. LO5 Type of Product Pizzas (in hundred thousands) Industrial Robots (in thousands) Production Alternatives ABCDE 109740 01234 Plot the Points to Create the Graph… 1-5 ©2013 McGraw-Hill Ryerson Ltd.5 Chapter 1, LO6

6. LO5 The law of increasing opportunity costs makes the PPC concave. 1-6 Pizzas Industrial Robots Attainable 0 1 2 3 4 5 6 7 8 9 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Unattainable A B C D E U ©2013 McGraw-Hill Ryerson Ltd.6Chapter 1, LO6

7. LO5 a b c d e MB = MC MC MB 15 10 5 0 1 2 3 Quantity of Pizza Marginal Benefit & Marginal Cost 1-7 ©2013 McGraw-Hill Ryerson Ltd.7 Chapter 1, LO6

8. LO5 U, represents unemployment or a failure to achieve productive efficiency. The arrows indicate that, by realizing full employment and productive efficiency, the economy could operate on the curve. 1-8 Pizzas Industrial Robots 0 1 2 3 4 5 6 7 8 9 14 13 12 11 10 9 8 7 6 5 4 3 2 1 A B C D E U ©2013 McGraw-Hill Ryerson Ltd.8Chapter 1, LO7