August 3, 2019

Running head: ASSIGNMENT 1 1

ASSIGNMENT 1

PARNEET KAUR MANN

2018091454

YORKVILLE UNIVERSITY

BUSI1023 Introduction to Economics for Managers

ASSIGNMENT 1 2

ASSIGNMENT 1

Ans 1. Economics is the study of use of scarce resources in order to satisfy unlimited

human wants. Consumers always have limited budget to spend so in order to purchase things

they must adjust their budget and purchase within it. Supposing a person is having $10 budget

for a week and he must allocate his budget to spend either on hamburgers which costs $2 or on

train ticket which is $0.50. so, a person can either have all the hamburgers which he can get 5 per

week ($10/$2) or he can spend $10 whole on train tickets which he can get 20 per week

($10/$0.50). A rational consumer will also allocate his income between these two items like he

can purchase some 4 hamburgers and 4 train tickets, 6 hamburgers and 8 train tickets 2

hamburgers and 12 train tickets or can have 1 hamburger and 16 train tickets.

Ans 2.

A.

0 10 20 30 40 50 60 70 80

0

10

20

30

40

50

60

70

(thousands of pounds)

apples

pears

B. 10,000 pounds of apples.

ASSIGNMENT 1 3

C. It increases. For example, to move to E, The Fruit Farm must give up 10,000 pounds

of apples to produce an additional 8,000 pounds of pears. For each additional 10,000 pounds of

apples foregone, the payoff in terms of pears gets progressively smaller.

D. It increases. For example, to move to E, The Fruit Farm has to give up 10,000 pounds

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