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September 10, 2013 ECON 2410 HOMEWORK #1

Instructor: Bram Gallagher

DUE: September 17, 2013 in class as a hard copy. This assignment is open-book, so your score will be based on how clearly your answers are explained. This homework will account for 2% of your final grade, and all questions are weighted equally.

1) Assume you are producing automobiles. The first automobile costs $6,000 to make, and every automobile after costs $1,000 more than the previous to make. Produce a chart of the total, average, and marginal cost of the second, third, and fourth automobile.

2) Make a PPF for Ray, who can compose two blues songs in an hour, or four jazz songs in an hour. Include one point that is unobtainable for Ray and one that is inefficient. Make sure to label your axes, curve, and points.

3) Illustrate the market for oranges with a supply and demand diagram. What would happen to equilibrium price and quantity if a citrus fungus attacked orange orchards, making many orange trees produce far fewer marketable fruits?