economic 201

Econ201 Assignment 1 Question One . Abdull ah loves donuts. The table below reflects the value Abdul lah places on each donut he eats: Value of first donut $0.60 Value of second donut $0.50 Value of third donut $0.40 Value of fourth donut $0.30 Value of fifth donut $0.20 Value of sixth donut $0.10 a. Use thi s information to construct Abdullah 's demand curve for donuts. b. If the price of donuts is $ 0.20, how many donuts will Abdullah buy? c. Show Abdullah ’s consumer surplus on your graph. How much consumer surplus would he has at a price of $0.20? d. If the price of donuts rose to $0.40, how many donuts would he purchase now? What would hap pen to Abdullah 's consumer surplus? Show this change on your graph. Question Two: Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. Hours Needed to Make 1 Quantity Produced in 2400 Hours Car Airplane Cars Airplanes Japan 30 150 80 16 Korea 50 150 48 16 1- What is Japan’ s opportunity cost of one car ? 2- Suppose Korea decides to increase its production of cars by 18. What is the opportunity cost of this decision? 3- In what product Japan has an absolute advan tage? and in what product Korea has an absolut e advantage ?