assignment on microeconomics

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Unit 1: Basic economic concepts

About this unit.

Learn how different types of economies make decisions about what to produce and how to distribute resources. We'll introduce key concepts like opportunity costs, trade-offs, and production possibilities. We'll also dive into why specialization and exchange are so important, and how property rights and incentives help keep free markets functioning.

Introduction to economics

• Introduction to economics (Opens a modal)
• Scarcity (Opens a modal)
• Scarcity and rivalry (Opens a modal)
• Four factors of production (Opens a modal)
• Economic models (Opens a modal)
• Normative and positive statements (Opens a modal)
• Lesson summary: Scarcity, choice, and opportunity costs (Opens a modal)
• Scarcity 4 questions Practice

Economic systems

• Property rights in a market system (Opens a modal)
• Markets and property rights (Opens a modal)
• Lesson overview: economic systems, the role of incentives, and the circular flow model (Opens a modal)
• Resource allocation and economic systems 4 questions Practice

Production possibilities frontier

• Production possibilities curve (Opens a modal)
• Opportunity cost (Opens a modal)
• Increasing opportunity cost (Opens a modal)
• The Production Possibilities Frontier (Opens a modal)
• PPCs for increasing, decreasing and constant opportunity cost (Opens a modal)
• Lesson summary: the production possibilities frontier (Opens a modal)
• Interpreting graphs of the production possibilities curve (PPC) 4 questions Practice
• Calculating opportunity costs from a production possibilities curve (PPC) 4 questions Practice

Comparative advantage and the terms of trade

• Comparative advantage, specialization, and gains from trade (Opens a modal)
• Comparative advantage and absolute advantage (Opens a modal)
• Opportunity cost and comparative advantage using an output table (Opens a modal)
• Terms of trade and the gains from trade (Opens a modal)
• Input approach to determining comparative advantage (Opens a modal)
• When there aren't gains from trade (Opens a modal)
• Comparative advantage worked example (Opens a modal)
• Comparative advantage and absolute advantage 4 questions Practice
• The terms of trade 4 questions Practice

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10.19: Assignment- Production and Costs

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In this module you learned that cost functions are derived from production functions and that the marginal cost curve is the inverse of the marginal product curve. Work through this problem to demonstrate those findings.

Production Function:

1. Using the production function, compute the figures for marginal product using the definition given earlier in this module.  Draw a graph of the marginal product curve using the numbers you computed.

Suppose this firm can hire workers at a wage rate of $10 per hour to work in its factory which has a rental cost of $100. Use the production function to derive the cost function.

2. First compute the variable cost for Q = 0 through Q = 5.

3. Next compute the fixed cost for Q = 0 through Q = 5.

4. Then compute the total cost for Q = 0 through Q = 5.  This is the cost function.

5. Finally compute the marginal cost for Q = 0 through Q = 5.  Draw the marginal cost curve and compare it to the marginal product curve above.  Explain what you see.

• Assignment: Production and Costs. Authored by : Steven Greenlaw and Lumen Learning. License : CC BY: Attribution

The opportunity cost of bus tickets is the number of burgers that must be given up to obtain one more bus ticket. Originally, when the price of bus tickets was 50 cents per trip, this opportunity cost was 0.50/2 = .25 burgers. The reason for this is that at the original prices, one burger ($2) costs the same as four bus tickets ($0.50), so the opportunity cost of a burger is four bus tickets, and the opportunity cost of a bus ticket is .25 (the inverse of the opportunity cost of a burger). With the new, higher price of bus tickets, the opportunity cost rises to $1/$2 or 0.50. You can see this graphically since the slope of the new budget constraint is steeper than the original one. If Alphonso spends all of his budget on burgers, the higher price of bus tickets has no impact so the vertical intercept of the budget constraint is the same. If he spends his entire budget on bus tickets, he can now afford only half as many, so the horizontal intercept is half as much. In short, the budget constraint rotates clockwise around the vertical intercept, steepening as it goes and the opportunity cost of bus tickets increases.

Because of the improvement in technology, the vertical intercept of the PPF would be at a higher level of healthcare. In other words, the PPF would rotate clockwise around the horizontal intercept. This would make the PPF steeper, corresponding to an increase in the opportunity cost of education, since resources devoted to education would now mean forgoing a greater quantity of healthcare.

No. Allocative efficiency requires productive efficiency, because it pertains to choices along the production possibilities frontier.

Both the budget constraint and the PPF show the constraint that each operates under. Both show a tradeoff between having more of one good but less of the other. Both show the opportunity cost graphically as the slope of the constraint (budget or PPF).

When individuals compare cost per unit in the grocery store, or characteristics of one product versus another, they are behaving approximately like the model describes.

Since an op-ed makes a case for what should be, it is considered normative.

Assuming that the study is not taking an explicit position about whether soft drink consumption is good or bad, but just reporting the science, it would be considered positive.

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This book may not be used in the training of large language models or otherwise be ingested into large language models or generative AI offerings without OpenStax's permission.

Want to cite, share, or modify this book? This book uses the Creative Commons Attribution License and you must attribute OpenStax.

Access for free at https://openstax.org/books/principles-microeconomics-2e/pages/1-introduction

• Authors: Steven A. Greenlaw, David Shapiro
• Publisher/website: OpenStax
• Book title: Principles of Microeconomics 2e
• Publication date: Sep 15, 2017
• Location: Houston, Texas
• Book URL: https://openstax.org/books/principles-microeconomics-2e/pages/1-introduction
• Section URL: https://openstax.org/books/principles-microeconomics-2e/pages/chapter-2

© Jun 15, 2022 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution License . The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.

Module 7: Production and Costs

Assignment: production and costs.

Step 1:  To view this assignment, click on  Assignment: Production and Costs.

Step 2:  Follow the instructions in the assignment and submit your completed assignment into the LMS.

• Assignment: Production and Costs. Authored by : Steven Greenlaw and Lumen Learning. License : CC BY: Attribution

Want to create or adapt books like this? Learn more about how Pressbooks supports open publishing practices.

9 Case Study: Principles of Microeconomics

Ed. elizabeth mays.

Maxwell Nicholson’s interest in open textbooks started as a student leader at the University of Victoria Students’ Society.

He ran on a platform of open textbooks, and won (when we spoke with him he was just ending his post as director of campaigns and community relations). His involvement in an open textbook was one way of fulfilling a campaign promise to bring free textbooks into use at the university.

After the campaign, Nicholson met with about ten professors in exploratory meetings to find out about the barriers to adoption for open textbooks. These included Dr. Emma Hutchinson, who taught the ECON 103 course that Nicholson (and three of the other candidates) had been longtime lab instructors for.

“It’s not going to go anywhere if the professor’s not onboard, so we were fortunate enough for Dr. Hutchinson to be really excited about it too,” Nicholson says.

Post-election, Nicholson’s first step to operationalize the project was to apply for a $4,800 grant for the project from BC Campus, which served as a granting agency for open textbook projects that could prove a demand. Despite a few bumps along the way, the funds came through for the project.

This open textbook project was different in that rather than being primarily the work of an instructor with funding to write it or a class-assigned project for students, the grant funded lab instructors to do the heavy lifting of compiling the textbook. The professor reviewed it and made the changes they thought necessary from there. This was doable since Nicholson had direct experience with how the instructor taught the class.

Nicholson had assisted the microeconomics class three times and the macroeconomics course once. “I’ve been fortunate to be on the pedagogy side to some extent, obviously nothing compared to professors, but when writing the textbook, that was really really crucial for me to have that lens when I was contributing.”

The textbook started as an adaptation of Timothy Taylor’s open textbook, Principles of Microeconomics, [1]  from OpenStax. But in the process of adapting the text, they found there were a lot of components that had to be written.

Ultimately, the textbook comprised around 30 percent material that came from Timothy Taylor’s book and 70 percent new content the lab instructors developed from their notes and the professor’s slide decks.

“The reason this project was most appealing is because she had her slides over here which taught what she wanted [students] to know, and then the publisher’s textbook was completely different,” Nicholson says. “So from the start our goal was really to align those two things.”

Nicholson says the lab instructors thought a lot about how students were going to consume the material, and what components of the course the instructor really wanted to stress.

They hoped to save students the cost of buying a textbook they didn’t really use.

The book was structured into eight topics, then the lab instructors divided them and did the heavy lifting to compile the chapters. Dr. Hutchinson edited each of the chapters to make sure everything was accurate, thorough and clear.

The process, Nicholson says, helped “remove the biggest barrier for professors–the magnitude of work that goes into redesigning a textbook.”

Nicholson says he thinks large first-year courses such as ECON 103 (which has 800 students per year) make the best candidates for OER–and are also the most likely courses to have lab instructors that can be leveraged to compile the content. (He recognizes that most professors probably don’t want to spend their nights and weekends becoming book publishers.)

“What [professors] can do if they know that they’re going to do this project, is take one of their most christened lab instructors, get access to grant funding and pay the lab instructor to work on the textbook,” Nicholson says. “Then they can be confident that it’s someone who not only knows the course, but knows the course as the professor teaches it.”

For his part, Nicholson says he learned a lot from the project, including understanding the work that goes into designing a course, and gaining a greater appreciation for good textbooks and discernment of those that aren’t well-matched for the subject. Creating OER offers great opportunities to customize a textbook to a course, he says, observing that it must be challenging for traditional publishers to create one-size-fits-all content for teachers, who may teach subjects very differently.

“I would hope they’re doing a lot of getting students to read this book and connect on it,” he says. “A lot of times it feels like they don’t.”

Nicholson, who is studying business and economics, says, “If you’re trying to create a product, you’re always supposed to ask your end user ‘what do you think?’”

So even if you don’t want to have students write a textbook for your class, he says, you should have some of your top students read it and provide feedback.

Otherwise, he says, students will either buy the textbook and not use it, or tell future students not to buy it.

“With a publisher’s resource, if it’s not useful, the students are going to stop buying it,” Nicholson says.

Of course, some might object to students having as much involvement in a textbook’s writing as Nicholson and his fellow lab instructors experienced, but Nicholson says that after the instructors create the chapters, the professor is going to change and edit things, and ensure the quality meets their standard.

“If you’re a respected faculty and you have the experience teaching and you’ve put that stamp of approval, I’m really confident that the resource is going to be [Dr. Hutchinson’s] resource. It’s not just some resource that was written by students.”

For students involved in such projects, he encourages them to appreciate the potential impact they might have through their involvement.

“If you’re involved in this kind of project, you’re going to be on the back end of the course design, and you’re able to take all the components that you thought were really bad about other textbooks and avoid those and leave all the really good elements,” Nicholson says.

Students working on an open textbook for a class should realize the impact they’ll have on future students who take that class–whether it’s the only survey course they ever take on the subject, or the foundation of many in their majors. Plus, they’re participating in an innovative movement in education.

Even for those who may not participate on an open textbook project, Nicholson says they can play a role in the movement as advocates, speaking with professors and outlining the benefits of OER, telling them when their book is expensive and there’s an alternative open textbook in use by a peer institution.

“Creating the buzz about [open textbooks]–students can do that.”

Key Takeaways

For Faculty:

• Engage with student governments, who may be able to spread the word about your project and help recruit interested and willing students.
• Involve TAs who have both taken the course and are assisting in teaching the course and leverage their experience as students.
• Review existing materials (slide presentations, lesson plans, assignments and more) to see if there are any that can be converted into content for the open textbook.
• Get student feedback on the completed book. It’s valuable! Be sure to implement fixes where appropriate for future editions.

For Students:

• Look for internal and external funding opportunities that may pay for your professor to hire you to help them create OER.
• Clarify roles, expectations, workflow, and timelines.
• Timothy Taylor, Principles of Microeconomics (Houston, OpenStax: 2014), https://openstax.org/details/books/principles-microeconomics. ↵

A Guide to Making Open Textbooks with Students Copyright © 2017 by Ed. Elizabeth Mays is licensed under a Creative Commons Attribution 4.0 International License , except where otherwise noted.

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Microeconomics assignment

2019, Lubna Publications

Economics is the study of how people make decisions, how much they work, what they work, what they buy, how much they save and how much they invest theirs savings.

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• Prof. Robert M. Townsend

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Intermediate microeconomic theory, assignments, problem sets (30%):.

I will assign five problem sets. Problem sets typically include a set of pure theory questions and a set of application questions, often based on readings. Late problem sets will not be accepted. No exceptions. In order to accommodate unanticipated events, illness, or conflicts in your schedule, I will automatically drop the problem set with the lowest score (for example, the one that you don’t hand in). You may collaborate with other students on problem sets, but you must write up all solutions independently and in your own words. If you submit a problem set that is a direct copy of another student’s, this will be considered academic dishonesty and will be dealt with accordingly. If you are stuck on a question, feel free to come to either of the TA’s office hours. We will do our best to point you in the right direction, but we will not fully answer the question for you. This is to ensure that you have adequate opportunity to master the material. After the problem set has been graded and handed back we are happy to go over solutions with you if they are still unclear.

Problem Set 1 (PDF)  

Problem Set 2 (PDF)  

Problem Set 3 (PDF) | Risk Sharing Simulation (xlsx)

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Problem Set 5 (PDF)

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