1.a) In this case, football is a “Neutral” good and Soccer is a “Normal” good for Sam. For neutral goods, the consumer does not care whether he has more of that good or less of that good. For such kind of goods the marginal utility is zero because they do not provide any satisfaction to the consumers. In the given figure, since Y is a neutral good the indifference curves are vertical straight lines and Sam could achieve higher utility only by consuming more of normal good i.e. soccer by moving from left to right. Here the marginal rate of substitution between the two goods is infinite throughout.

b) In this case, for Mary Gadgets and Widgets are Perfect substitutes. Goods are considered as perfect substitutes when one good can be substituted for another at a constant rate. In this case, the indifference curves linear downward sloping straight lines and the Marginal rate of substitution is a constant. Given two goods X and Y the MRS is given as MRS = ΔY/ΔX. In the given case MRS = 1/3 throughout.

c) In this case for Pete, Left Shoes and Right Shoes are Perfect compliments. Goods are considered as perfect compliments when they are consumed together in fixed proportions i.e. the quantities of both the goods are fixed to provide a certain level satisfaction to the consumer. In this case, the indifference curves are L-shaped and the two goods cannot be substituted for each other because of which their marginal rate of substitution is zero.

2.The administrative trade policies that are in place in Australia that make it difficult for imports to enter are:

• The Australian government imposes regulations, duty taxes, quarantine and treatments which are applicable to imported goods.
• The government supports domestic goods and provides subsidies on the production of domestic goods and services.
• The importers have to make declarations to the Australian government which enforces import restrictions.

3.

Ans 1.

Diversity has been recognised as a key factor behind innovation by leaders across the world. As businesses become more global, gaining cultural insights has become more important. People from diverse cultural backgrounds bring their unique set of skills and experiences to the workplace and create an atmosphere of learning where creative mindsets can flourish.

It is clear from the above explanation that diversity and innovation are positively correlated. Hence, the correct answer is option one -TRUE.

Ans 2.

All legal issues need not be taken to court. Employees must try to sort things out informally (privately) and keep the issue from turning into a dispute. This way the organisation will save both time and money involved in going through a formal lawsuit. A mediator may be allowed to intervene for resolving the issue.

The correct answer is option two - FALSE.

Ans 3.

The original Act protected people from all races, religions, color and nations. Age, sexual orientation and women's health related issues were covered later in amendments.

From the above explanation, the correct answer ought to be option three - People of a specific race.

Ans 4.

Diversity at the workplace breaks stereotypes and allows more creative thinking. Managers can make better decisions after listening to different perspectives of people from diverse backgrounds. Though quotas are also important in promoting diversity, identifying the unique qualities of people and utilizing their knowledge in managing an enterprise, irrespective of biases, leads to greater productivity. So, option two - Diversity spurs innovation. .....consider. should be marked as the answer.

4.

E. 1X = 0.35 Y

It takes 1 hour to produce 1 unit of X and 4 hours to produce 1 unit of Y for country A.

It takes 6 hours to produce 1 unit of X and 12 hours to produce 1 unit of Y for country B.

So, in order to produce 1 unit of X, country A has to give up 1/4 units of Y and country B has to give up 1/2 units of Y. So, country A has lesser opportunity cost. So, country A has comparitive advantage in X.

In order to produce 1 unit of Y, country A has to give up 4 units of X whereas country B has to give up 2 units of X. Country B has lesser opportunity cost of producing Y. So, country B has comparitive advantage in Y.

Therefore, Country A should specialize in X and country B should specialize in Y.

In one hour, Country A can produce 1X or (1/4)Y.

In one hour, Country B can produce (1/6)X or (1/12)Y.

So, country A would be willing to trade 1X if it gets atleast (1/4)Y (=0.25Y) in return and country B will be willing to trade 1Y if it gets atleast (1/2)X (=0.5X) in return. So, when gains from trade is 1X=0.35Y, both countries will gain.

C. When 1X = 0.25Y, country A will be indifferent between trading and not trading because, it can produce 0.25Y in the time required to produce 1X. But country B will be willing to trade.

D. When 1X = 0.5Y, country B would be indifferent because in the time taken to produce 0.5Y, it can produce exactly 1X. But country A will strictly gain. So, A would be willing to trade.

E. When 1X= 0.35Y, both countries will strictly gain because, for Country A, it can produce only 0.25Y in the time it can produce 1X. So, it will be willing to give 1X in return for 0.35Y. For country B, it can produce only 0.7X in the time it can produce 0.35Y. So, it would be willing to give 0.35Y in return for 1X.

Therefore, E is the mutually beneficial terms of trade.