Question

1. Give the three reasons that explain why the division of labor increases an economy’s level of production.

2. What are three reasons to study economics?

3. Suppose you have a team of two workers: one is a baker and one is a chef. Explain why the kitchen can produce more meals in a given period of time if each worker specializes in what they do best than if each worker tries to do everything from appetizer to dessert.

4. Why do you think that most modern countries’ economies are a mix of command and market types?

5. Can you think of ways that globalization has helped you economically? Can you think of ways that it has not?

6. What is comparative advantage?

7. What does a production possibilities frontier (PPF) illustrate?

8. Explain why societies cannot make a choice above their production possibilities frontier and should not make a choice below it.

9. During the Second World War, Germany’s factories were decimated and suffered many human casualties, both soldiers and civilians. How did the war affect Germany’s production possibilities curve?

10. Marie has a weekly budget of $24, which she likes to spend on magazines and pies.

a) If the price of a magazine is $4 each, what is the maximum number of magazines she could buy in a week?

b) If the price of a pie is $12, what is the maximum number of pies she could buy in a week?

c) Draw Marie’s budget constraint with pies on the horizontal axis and magazines on the vertical axis. What is the slope of the budget constraint?

d) What is Marie’s opportunity cost of purchasing a pie?

Answer 1

1) :- the three reasons that explain why the division of labor increase an economy's level of production

• specialization ; it allows workers to focus on their specialized production work.

• those workers who are specialize in their work are produce higher quality items more quickly.

• consumers and producers are allows to take advantage of economy of scale.

2) :- the three reasons to study economic are

• it perform variety of program :- it is part of most of aspect of everyday life

• focus on real life:- it is focused on learning from case studies . Which help in easily understand how theory can tell you something about real life.

• excellent graduation prospects:- most of students easily get job after graduation as economist because it is needed in most businesses.

3) :- devision of labor which means that the good and services is produced is divide into number of task which are performed by different worker instead of one person do the all work. Due to devision and subdivision of work , worker and businesses can produce a greater quantities of output .

Specialization allows person to focus on that work in which he have an advantage . People have some different talent, skill and interest SO they Will be better in some job than at other so that why kitchen can produce MORE meal in given period of time if each worker specializes in what they do best than if each worker tries to do everything from appetizer to dessert.