- •Practice Assignment № 1
- •2) Which of the following best explains a linear production possibilities curve?
- •3) Which of the following statements best explains why a nation's consumption possibilities line lies outside of its production possibilities line?
- •4) How is a nation's production possibilities curve affected in the long run by a boom in both new and existing housing sales in the present?
- •5) The sacrifice or opportunity cost associated with an individual's consumption of an additional good:
- •7) Production efficiency is achieved:
- •Practice Assignment № 2
- •Variant № _____
- •Practice Assignment № 3
- •Practice Assignment № 4
- •Variant № _____ Main Requirement to the Design of the Assignment
- •Initial Data
- •List of the Tasks:
- •Individual data
- •Practice Assignment № 5
- •Individal assignment № 6 market structure analisys
Practice Assignment № 4
Variant № _____ Main Requirement to the Design of the Assignment
The assignment should be fulfilled in a strict accordance with the list of the tasks. Every part of the assignment devoted to a certain task must start with the appropriate number (1.1, 1.2, 1.3 etc.) except parts 1.5, 1.7, 1.11, 1.13. All the figures have to be drawn on the basis of the real data, computed before with regard to scale. All the axis and curves should be named. It is allowed to use pencils of different colors to graph curves.
Initial Data
All the calculation has to be performed on the following data that are given:
– consumer’s utility function is the same for every variant ;
– prices of good and good ;
– consumer’s income ;
– changes in consumer’s income ;
– changes in price of good .
The values of these parameters you can find in the pool of data enclosed according to his or her number of variants.
List of the Tasks:
In the assignment a student should fulfill the following tasks:
1.1. Write down the equation of the budget line. Graph the budget line in the Figure 1.
1.2. Compute the consumer’s equilibrium bundle (optimal choice of the consumer of goods X and Y).
1.3. Draw the graph of consumer’s indifference curve, that goes through the equilibrium bundle on the Figure 1 and mark the consumer’s equilibrium point (E1).
1.4. On the basis of the data of individual variants, write down the equation of budget line when consumer’s income has changed.
1.5. Draw the graph of new budget line in the Figure 1.
1.6. Find out new consumer’s equilibrium bundle and draw the new graph of consumer’s indifference curve in the same Figure. Mark consumer’s new equilibrium point (E2).
1.7. On the results got in the 1.6 build up:
– Income-consumption curve (Figure 1);
– Engel curve for the goods X and Y (Figure 2).
1.8. Analyzing the form of Engel curve that was build up define the character of goods X and Y (normal, inferior).
1.9. Suppose the price of the good X changes, write down the new equation of budget line.
1.10. Make the copy of the Figure 1 with initial budget line, indifference curve and consumer’s equilibrium point (E1) depicted. Note the new figure as Figure 3.
1.11. Draw the graph of new budget line after the price of X has changed in the Figure 3.
1.12. Find out new consumer’s equilibrium bundle and draw the new graph of consumer’s indifference curve. Mark consumer’s new equilibrium point (E3).
1.13. On the results achieved in the 1.12 build up:
– Price-consumption curve (Figure 3);
Consumer’s individual demand curve on good X (Figure 4).
Make a conclusion about relationship between X and Y goods.
Individual data
Variant |
I |
Px |
Py |
∆I |
∆Px |
1 |
10 |
1 |
2 |
2 |
1 |
2 |
20 |
1 |
2 |
-4 |
2 |
3 |
10 |
2 |
1 |
-2 |
-1 |
4 |
20 |
2 |
1 |
4 |
3 |
5 |
16 |
1 |
4 |
-4 |
3 |
6 |
16 |
4 |
1 |
4 |
1 |
7 |
32 |
2 |
4 |
-8 |
6 |
8 |
32 |
4 |
2 |
-16 |
4 |
9 |
18 |
1 |
3 |
-3 |
2 |
10 |
18 |
3 |
1 |
-6 |
3 |
11 |
36 |
2 |
3 |
-6 |
4 |
12 |
36 |
3 |
2 |
6 |
3 |
13 |
12 |
2 |
3 |
-6 |
-1 |
14 |
12 |
3 |
2 |
6 |
-1 |
15 |
24 |
2 |
3 |
-6 |
1 |
16 |
24 |
3 |
2 |
6 |
-1 |
17 |
20 |
4 |
2 |
4 |
1 |
18 |
20 |
2 |
4 |
-4 |
3 |
19 |
30 |
2 |
5 |
-10 |
4 |
20 |
30 |
5 |
2 |
-10 |
1 |
21 |
14 |
2 |
7 |
7 |
-1 |
22 |
14 |
7 |
2 |
7 |
-5 |
23 |
28 |
7 |
2 |
-7 |
-5 |
24 |
28 |
2 |
7 |
-7 |
5 |
25 |
26 |
2 |
6,5 |
-6 |
2 |