ECON 1014 HOMEWORK #1

Name: ___________________________________ Date: ______________

Due by 10pm on Wednesday, January 30. Homework assignments must be

completed and submitted through Canvas by the deadline.

PART I

True or False

1. This course satisfies the College of Arts and Science Diversity Intensive requirement.

2. You should contact us for any course related issues through your personal email
account.

3. You can choose to opt-out of the Auto-Access program (ebook/LaunchPad) in this

course without any consequences.

4. The Learning Curve assignments always have the same due date as the corresponding
homework.

5. A one-page cheat sheet is allowed on all exams, including the final.

6. Homework assignments can be submitted via Canvas an unlimited number of times,

but only the final attempt will be graded.

7. If you fail to submit your homework before the deadline, you should email us
immediately since we may give you a chance for late submission depending on your
circumstances.

8. Missing one homework will harm my course grade.

9. To receive exam accommodations, you need to inform the course instructor and
schedule the exam with the Office of Disability Services at least one week before the
exam date.

10. You can use both the REEF app or the i-clicker remote to participate in REEF polling
in this class.

11. You will get the in-class REEF points as long as you successfully submit answers to
all questions.
12. If you fail to check in for attendance or miss more than one REEF question for any
reason in class, you should check in with the Head TA right after class. No late claims
for any missed REEF points will be accepted once the Head TA and instructor have
left the lecture hall.

13. When you miss a class with a valid excuse, you can email the Head TA to receive
credit for the missed REEF points.

14. If you are caught answering REEF questions for another student or have answers to
REEF questions in a class that you did not attend, you will potentially face
disciplinary action.

Multiple choice

15. Which ID should you put in your REEF account?

A) Student ID
B) Pawprint
C) Mizzou Email address
D) Driver License Number

16. When you fail to check in for attendance or miss more than one REEF question in a
class session for any reason, you should check in with the Head TA right after class.
How many chances are you given to do so throughout the semester?
A) 1
B) 2
C) 3
D) Unlimited

17. If your actual final REEF percentage is 62.5%, what REEF grade will you see on
Canvas?
A) 60%
B) 62.5%
C) 70%
D) 80%

18. How long can it take for grades to transfer from LaunchPad to Canvas?
A) Immediately
B) Up to 6 hours
C) Up to 12 hours
D) Up to 24 hours
19. How can you seek help for questions that you have over the course material? (select
all that apply)
A) Email instructor
B) Stop by during TA office hours
C) Post questions on Canvas Discussion Forum
D) Email the Tas
E) Stop by during instructor’s office hours

PART II

Chapter 1

1. Suppose you have ordered a value meal at a local fast-food restaurant. The cashier
asks if you would like to “super-size” your meal. In order to make an efficient
decision, you should compare: (1 pt)
A) the total cost of the larger, “super-sized” meal versus the total benefits received.
B) the additional cost of the larger meal versus the additional benefits received.
C) the total cost of the larger meal versus the additional cost to the restaurant.
D) the benefits of the smaller meal versus the additional benefits obtained from
consuming the “super-sized” meal.

2a. Would the opportunity cost to attending college be greater or lesser during a
recession? Why? (2 pts)

b. Given your answer above, all else being equal, would you expect more or fewer
students to enter college during a recession? (1 pt)
Chapter 2

3. Patrick Mahomes is one of the best quarterbacks in the NFL, in addition to being one
of the best chefs in the United States. Despite this, Patrick Mahomes has a personal
chef who cooks his meals who is slightly worse at cooking than him. While Patrick
Mahomes has a(n) __________ (absolute/comparative) advantage in both cooking
and playing football he still hires a chef because his chef has a(n) ________
(absolute/comparative) advantage in cooking. (1 pt)

4. As trade becomes more widespread, specialization (increases/decreases), which in turn

(increases/decreases) productivity. (1 pt):
/22

5. The ability of one producer to produce one good or service using fewer inputs than
another producer is called ________ _________.
The ability of a producer to produce a good with a lower opportunity costs in
comparison to other producers is referred to as ________ __________(1 pt)

6. If instead of specialized doctors (neurologists, cardiologists, gastroenterologists, etc.)

we had doctors who each knew the same things about all aspects of medicine, it
would be: (1 pt):
A) better because then we could just go to one doctor with no loss of quality in medical
care.
B) better because total medical knowledge in society would increase.
C) worse because it would increase health care costs.
D) worse because total medical knowledge in society would decrease.

7. According to the theory of comparative advantage, a country should specialize in

producing a good that involves: (1 pt):
A) more inputs than those in other countries.
B) fewer inputs than those in other countries.
C) a higher opportunity cost than that of other countries.
D) a lower opportunity cost than that of other countries.
8. (Table: iPhone and iPod Production) According to the table on iPhone and iPod
production, which country has an absolute advantage in the production of iPhones
and iPods? (1 pt):

The country that has an absolute advantage in the production of iPhones is

________ ,and the country that has an absolute advantage in the production of iPods
is __________.

9. (Table: iPhone and iPod Production) According to the table, Canada should specialize
in producing ________, and the United States should specialize in producing
_______. (1 pt)?

A) iPods; iPods
B) iPhones; iPhones
C) iPhones; iPods
D) iPods; iPhones

10. (Table: iPhone and iPod Production) According to the table on iPhone and iPod
production, an acceptable range of trade prices between Canada and United States
would be: (1 pt):

A) 1 iPhone for 3/4 iPod< trade price < 1 iPhone for 1 iPod.
B) 1 iPhone for 1 iPod< trade price < 1 iPhone for 4/3 iPod.
C) 1 iPod for 3/4 iPhone< trade price < 1 iPod for 1 iPod.
D) 1 iPod for 1 iPhone< trade price < 1 iPod for 2 iPod.
11. (Figure: PPF Nickel & Textiles) Refer to the figure.

a). What is Country A’s opportunity cost of producing 1 unit of Good X? (1 pt)

b). What is Country B’s opportunity cost of producing 1 unit of Good Y?(1 pt)

c). Which country has the comparative advantage in producing Good X? (1 pt)

d). Which country has the comparative advantage in producing Good Y? (1 pt)

e). Would both countries be willing to accept a trade price of 1.5 units of Good X
for one unit of Good Y? (1 pt)

f) If each country specializes in the good for which they have the comparative
advantage, how many units of Good X and Good Y are produced overall? (1 pt)

g) Compared to the pre-trade production points illustrated on the graphs by the

points labeled P, how much does specialization increase total production? (1 pt)
12. Libby sells her high school class ring, which she considers worthless, to her classmate
Jehoshephat for $30. Determine whether the following statements are true (T) or
false (F) (1 pt total, .25 pt each)

Jehoshephat was made worse off by this trade because Libby considers the ring
worthless.

Jehoshephat considers the ring to be worth at least $30.

If Libby put greater value on the ring than Jehoshephat, this transaction could
still have happened.

Libby and Jehoshephat have different preferences for the ring.

Chapter 21:

13. Explain the difference between positive and normative economics. (1 pt)

14. Indicate whether each statement is a positive statement (P) or a normative statement
(N). (.25 pts each; 1 pt total)

a. Import restrictions on sugar will increase sugar prices.

b. The government should limit imports of sugar.

c. Schools need to limit their students' sugar intake.

d. The current inflation target is 2%.