Q1: Zainab has a weekly budget of $48, which she likes to spend on magazines and pies. [1 Mark]
A) If the price of a magazine is $8 each, what is the maximum number of magazines she could buy in a week? 
B) If the price of a pie is $24, what is the maximum number of pies she could buy in a week? 
C) Draw Zainab’s budget constraint with pies on the horizontal axis and magazines on the vertical axis. What is the slope of the budget constraint? 
D) What is Zainab’s opportunity cost of purchasing a pie? 

  
Q2: Many of the goods that China’s Citizens enjoy are produced abroad, and many of the goods produced in the China are sold abroad. When goods are produced abroad and sold domestically, the process is called import and when goods are produced domestically and sold abroad, that process is called export. Suppose an average worker in China can produce one kg of soybeans in 40 minutes and one Kg of coffee in 120 minutes, while an average worker in Paraguay can produce one kg of soybeans in 100 minutes and one kg of coffee in 150 minutes. Answer the following questions. [2 Marks]
A) Which country has the absolute advantage in coffee? Explain.
B) Which country should produce coffee? Explain.
C) If the two countries specialize and trade with each other, which country will import coffee? Explain.
D) Assume that the two countries trade with each other and the country importing coffee trades 2 Kgs of soybeans for 1 Kg of coffee. Explain why both countries will benefit from this trade.

  
Q3: Illustrates the interaction (equilibrium point) of demand and supply in the market for petrol based on the table below. And explain following conditions.    [2 Marks]
A) Show excess supply (surplus of petrol) and excess in Demand (shortage of petrol) in the same graph and explain.
B) Suppose the government decided that, since petrol is a necessity, its price should be legally capped at $1.30 per gallon. What do you anticipate would be the outcome in the petrol market if at this price quantity supplied in the market is 575 Millions of gallons? 
Attached is the table for answering in addition with the course materialsInstructions – PLEASE READ THEM CAREFULLY

· The Assignment must be submitted on (WORD format only) via allocated folder.
· Students must mention question number clearly in their answer.
· Late submission will NOT be accepted.
· Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.
· All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism).

Assignment 1

Q1: Zainab has a weekly budget of $48, which she likes to spend on magazines and pies. [1 Mark]

A) If the price of a magazine is $8 each, what is the maximum number of magazines she could buy in a week?
B) If the price of a pie is $24, what is the maximum number of pies she could buy in a week?
C) Draw Zainab’s budget constraint with pies on the horizontal axis and magazines on the vertical axis. What is the slope of the budget constraint?
D) What is Zainab’s opportunity cost of purchasing a pie?

Q2: Many of the goods that China’s Citizens enjoy are produced abroad, and many of the goods produced in the China are sold abroad. When goods are produced abroad and sold domestically, the process is called import and when goods are produced domestically and sold abroad, that process is called export. Suppose an average worker in China can produce one kg of soybeans in 40 minutes and one Kg of coffee in 120 minutes, while an average worker in Paraguay can produce one kg of soybeans in 100 minutes and one kg of coffee in 150 minutes. Answer the following questions. [2 Marks]

A) Which country has the absolute advantage in coffee? Explain.
B) Which country should produce coffee? Explain.
C) If the two countries specialize and trade with each other, which country will import coffee? Explain.
D) Assume that the two countries trade with each other and the country importing coffee trades 2 Kgs of soybeans for 1 Kg of coffee. Explain why both countries will benefit from this trade.

Q3: Illustrates the interaction (equilibrium point) of demand and supply in the market for petrol based on the table below. And explain following conditions. [2 Marks]

A) Show excess supply (surplus of petrol) and excess in Demand (shortage of petrol) in the same graph and explain.
B) Suppose the government decided that, since petrol is a necessity, its price should be legally capped at $1.30 per gallon. What do you anticipate would be the outcome in the petrol market if at this price quantity supplied in the market is 575 Millions of gallons?

Price (per gallon in $)

Quantity Demanded (millions of gallons)

Quantity Supplied (millions of gallons)

1.00

800

500

1.20

700

550

1.40

600

600

1.60

550

640

1.80

500

680

Answer:N. Gregory Mankiw

Macroeconomics
Principles of
Sixth Edition

1
Ten Principles of Economics
Premium PowerPoint
Slides by
Ron Cronovich
© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Dear Colleague,

Thank you for using the Premium PowerPoints for Mankiw’s Principles of Economics. I update these approximately once per year to update the data, fix any typos, and incorporate the best suggestions from users like yourself. If you have any suggestions, corrections, or feedback, please email me at rcronovich@carthage.edu. Check the textbook’s website to make sure you’re always using the most recent version.

In this area (the “notes” section), I occasionally include notes that are visible only to you and will not display during your presentation in class. In slides with data tables or charts, the notes area provides the source information (often a URL or web address to the original data). In other slides, the notes area provides information that might be helpful when teaching this material, particularly for new instructors and graduate assistant teachers.

Notes about Chapter 1:

Most instructors try to cover this chapter in a single class session (especially those that are teaching the second of a two-semester sequence). If you are teaching principles of microeconomics, you might consider skipping Principles 8-10, which deal with macroeconomics.

Near the end of the chapter are four slides titled “FYI: How to Read Your Textbook.” In the notes section of these slides, I describe an in-class activity that teaches effective reading skills to students.

The 6th edition of the textbook includes a new case study on the incentive effects of changing gasoline prices. Encourage your students to check it out.
0

In this chapter,
look for the answers to these questions:
What kinds of questions does economics address?
What are the principles of how people make decisions?
What are the principles of how people interact?
What are the principles of how the economy as
a whole works?

‹#›
© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

1

What Economics Is All About
Scarcity: the limited nature of society’s resources
Economics: the study of how society manages its scarce resources, e.g.
how people decide what to buy,
how much to work, save, and spend
how firms decide how much to produce,
how many workers to hire
how society decides how to divide its resources between national defense, consumer goods, protecting the environment, and other needs
0

‹#›
© 2012 Cengage Learning. All Rights Reserved. May not be copied,N. Gregory Mankiw

Macroeconomics
Principles of
Sixth Edition

4
The Market Forces of Supply and Demand
Premium PowerPoint
Slides by
Ron Cronovich
© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
‹#›

This is perhaps the most important chapter in the textbook. It’s worth mentioning to your students that investing extra time to master this chapter will make it easier for them to learn much of the subsequent material in the book.

This is also one of the longest chapters in the textbook, and this PowerPoint file is one of the most graph-intensive. Many students taking economics for the first time have difficulty grasping the graphs, which are critically important in this and all subsequent chapters in the book. So an extra degree of hand-holding might be appropriate.

Accordingly, this PowerPoint has carefully detailed animations that build many of the graphs with great care. For example, we show a demand or supply schedule next to the axes, and highlight each coordinate pair in the table as the corresponding point appears on the graph.

Please be assured that the presentation of graphs is more streamlined in subsequent chapters. In this early chapter, though, we do not want to leave any students behind.

If your students are already very comfortable with scatter-type graphs, you may wish to simplify or turn off the animation on these slides, in order to get through them faster.
0

In this chapter,
look for the answers to these questions:
What factors affect buyers’ demand for goods?
What factors affect sellers’ supply of goods?
How do supply and demand determine the price of a good and the quantity sold?
How do changes in the factors that affect demand or supply affect the market price and quantity of a good?
How do markets allocate resources?

‹#›

© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
‹#›

1

Markets and Competition
A market is a group of buyers and sellers of a particular product.
A competitive market is one with many buyers and sellers, each has a negligible effect on price.
In a perfectly competitive market:
All goods exactly the same
Buyers & sellers so numerous that no one can affect market price—each is a “price taker”
In this chapter, we assume markets are perfectly competitive.
0

‹#›

© 2012 Cengage Learning. All Rights ReN. Gregory Mankiw

Macroeconomics
Principles of
Sixth Edition

2
Thinking Like an Economist
Premium PowerPoint
Slides by
Ron Cronovich

© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Besides introducing students to the economic way of thinking, this chapter introduces the Production Possibilities Frontier, the first of many graphs covered in the textbook. The PPF will be used extensively in Chapter 3 (Interdependence and the Gains from Trade).

It would be helpful to ask your students to bring calculators to class on the day you cover this chapter (as well as Chapter 3).
0

In this chapter,
look for the answers to these questions:
What are economists’ two roles? How do they differ?
What are models? How do economists use them?
What are the elements of the Circular-Flow Diagram? What concepts does the diagram illustrate?
How is the Production Possibilities Frontier related
to opportunity cost? What other concepts does it illustrate?
What is the difference between microeconomics and macroeconomics? Between positive and normative?

‹#›

© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

1

The Economist as Scientist
Economists play two roles:
1. Scientists: try to explain the world
2. Policy advisors: try to improve it
In the first, economists employ the
scientific method,
the dispassionate development and testing of theories about how the world works.

‹#›

© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

2
2

Assumptions & Models
Assumptions simplify the complex world,
make it easier to understand.
Example: To study international trade,
assume two countries and two goods.
Unrealistic, but simple to learn and
gives useful insights about the real world.
Model: a highly simplified representation of
a more complicated reality.
Economists use models to study economic issues.

‹#›

© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

3
3

Some Familiar Models
A road map

‹#›

© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or




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