Q Question 1 4 / 4 pts The production possibilities curve below shows the hypothetical relationship between the production of guns (national defense) and butter (social goods) in an economy. Combination Guns Butter A 0 4 B 14 3 C 26 2 D 36 1 E 44 0 Your response should be a number ONLY. 1. What is the marginal opportunity cost of producing the second unit of butter? 2. What is the total opportunity cost of producing the second unit of butter? 3. What is the marginal opportunity cost of producing the third unit of butter? 4. What is the total opportunity cost of producing the third unit of butter? Question 2 3 / 3 pts Using the Supply and Demand data below, graph the equilibrium price and quantity for the market for oats. Identify the equilibrium price and quantity. (DO NOT list every price and quantity in your graph.) Price Quantity demanded (bushels of oats) Price Quantity supplied (bushels of oats) $4.40 10,000 $4.40 40,000 4.20 15,000 4.20 35,000 4.00 20,000 4.00 30,000 3.80 25,000 3.80 25,000 3.60 30,000 3.60 20,000 3.20 35,000 3.20 15,000 Equilibrium Price $ Equilibrium Quantity Describe the market at a price of $4.20. At $4.20, there is a (select wither Shortage or Surplus) of (state a numerical value) units. Describe the market at a price of $3.60 At $3.60, there is a (select wither Shortage or Surplus) of (state a numerical value) units. Question 3 3 / 3 pts Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. Labor Hours Needed to Make 1 Unit of Number of Units Produced in 100 Hours Cheese Bread Cheese Bread England 1 4 100 25 Spain 4 20 25 5 England should export Spain should export Construct a terms of trade ration that would benefit each nation Cheese to one unit of Bread 5 / 5 pts Assume that the United States and China each produce steel and toys. The following are the production possibility schedules for each nation. Answer the questions below based on the PPF schedules. China A B C D E Steel 8 6 4 2 0 Toys 0 10 20 30 40 United States A B C D E Steel 16 12 8 4 0 Toys 0 12 24 36 48 1. Which country has absolute advantage in the production of steel? 2. Which country has absolute advantage in the production of toys? 3. Which country has comparative advantage in the production of toys? 4. Which country has comparative advantage in the production of steel? 5. If the two countries specialize and trade with each other, which country will import steel? Question 5 2 / 3 pts A gasoline station very near a professional football stadium, parks cars on its lot to make money on game days. Last year it charged $4.00 per car and parked 1200 cars. This year it raised the parking price to $5.00 and parked 900 cars. Express your answer with two digits after the decimal point. ( 1.48 or .67) Using the Total Revenue Test, is this change Elastic or Inelastic? Calculate the elasticity of demand using the midpoint formula? Should the gas station raise the price? (Yes or No)