Macroeconomics Module 1 Upload

Macroeconomics Module 1 Upload.

1. Answer the following based on the videos on this particular module.

1. What is economics as defined in the Scarcity and Choice video?
2. According to the Resources video, which are four resources used to produce goods and services?
3. What is the opportunity cost of increased military spending according to the Opportunity Cost video?
4. Explain one change in the economy that is likely to shift the production possibilities curve outward?

2. The following is a production possibilities table for potatoes (lbs) and fish(lbs) in Atlantis, a small island in the South Atlantic.

                                A                             B                             C                             D                            E              F

Potatoes              1,000                     800                         600                         400                         200         0

Fish                        0                              300                         500                         600                         650         675

a) Draw the production possibilities frontier with potatoes on the horizontal axis and fish on vertical axis illustrating these options, showing points A-F.

b) Can Atlantis produce 500 pounds of fish and 800 pounds of potatoes? Explain. Where would this point lie on the production possibilities curve?

c) What is the opportunity cost of increasing the annual output of potatoes from 600 to 800 lbs?

d) What is the opportunity cost of increasing the annual output of potatoes from 200 to 400lbs?

e) Label point G inside the production possibilities curve. What does it indicate? Label H outside the curve. What does this point indicate? What must occur for the economy to attain the level of production indicated by point H?