Part A
Answer any TWO of the following FOUR questions (10 points)
A-1. Shoplifting leads to waste. How?
A-2. According to an economist, what is the approximate cost of a one week holiday in Puerto Vallarta, Mexico? Would economist include the cost of food eaten in Mexico?
A-3. Economists believe that individual trees are "rational" but a forest is not. Explain.
A-4. According to economists, a watch and a CRC (cote-R or cote de rendement) have certain similarities. What are they?
Part B
Answer ALL of the following FIVE questions (20 points)
B-1. WilmaFlinstone is able to produce 60 pizzas or 120 donuts a day (or any linear combination of these). Show below the situation (PPF) of Wilma. Label point A where Wilma is only producing pizzas.
B-2. Starting from point A and assuming she's rational, Wilma decides to make 8 donuts. Label this new point as B. How many pizzas must she give up?
I'll finish this after
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