1case 1 Case 1case 2

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Pages: 3
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Question 1:
a) Positive assessment
b) Positive assessment
c) Normative assessment
d) Positive assessment
e) Normative assessment
Question 2:
No, Atlantis cannot produce these numbers. This point would be outside the production possibility frontier.
The opportunity cost will be 200 pounds of fish. (500-300)
The opportunity cost will be 50 pounds of fish. (650-600)
The opportunity cost increases when Atlantis produces more potatoes. The more potatoes it produces, the less fish it can produce. The production possibility frontier gets steeper when moving to the right. The slope is downward.
Question 3:
2,000 × 286 = 572,000 hotel stays.
Total Hotel stays = 538,000 + 572,000 = 1,110,000 hotel stays.
538,000/2000 = 269 metric tons of fish.
Total metric tons of fish = 286 + 269 = 555 metric tons of fish.
c)
Question 4:
a) Case 1Case 2
b) Case 1Case 2
c) Case 1Case 2
d) Case 1Case 2
Question 5:
Question 6:
a)b)
c)d)
Question 7:
a)b)
c)d)
e)
Question 8:
a)
Consumer Willingness Price CS
1 $40 $29 $11
2 35 29 6
3 30 29 1
4 25 29 0
5 20 29 0
6 15 29 0
$18
The total consumer surplus is $18.
b)
Consumer Willingness Price CS
1 $40 $19 $21
2 35 19 16
3 30 19 11
4 25 29 6
5 20 29 1
6 15 29 0
$55
The total consumer surplus is $55.
The first three consumers’ surplus increased by $10, which is the same as the decrease in the price from 29 to 19. Also, consumer 4 now has a surplus of $6, and consumer 6 has surplus of $1. Total consumer surplus changed from $18 to $55; an increase of $37 of consumer total surplus. In addition, this shows that the demand for computer games increased when the price dropped.
Question 9:
a)b)
Question 10 (Article):
The first article talks about safety regulations, and how the law of seatbelts is not that useful because people would drive more recklessly knowing that the seatbelt is protecting them, which will still result in accidents. In addition, a few studies showed that seatbelts and the death rate are positively correlated; if more people wear seatbelts, more people would still be dying, so both cancel each other out. Moreover, countries with
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