6. Efficiency versus equity The economy consists of two consumers, Antonio and Dmitri. They have ordered a pizza and are deciding how to divide it between themselves. They have brainstormed a few solutions, and now they want to consult an economist to determine if their solutions are efficient and fair. Assume that a pizza consists of eight slices, and the more pizza Antonio and Dmitri eat, the happier they are. One of their solutions is to have Dmitri eat four slices, Antonio eat three slices, and have them leave one slice in the box for no one to eat. An economist would say this solution is

4. The government of a country must make a decision between increasing military spending and subsidizing food available because the trucks carrying it are on strike, Shehi water available for irrigating a crop because it is used for other crops. 1. Any resources that are made by humans and used to create other goods and services are called Identify the choice that best completes the statement or answers the question. racy Intro to Economics Chapter 1 9-20-21 333 2nd hr Class: pate: Multiple Choice a. services, b. production. An example of a shortage is limited amounts of capital. labor. 2. a. b. labor available because the workers baye other joos c. food available because few people want The resources used to make all goods and services are the production possibilities. factors of production. d. 3. buy it. production trade-offs. d. opportunity costs. c. wheat farmers. This kind of decision is a guns or butter issue, decision at the margin. global trade-off. basic economic decision. с.…

8. Ann and Barbara are computer programmers in Nashville who are planning to move to Seattle. Each owns a house that has been appraised for $100,000. Ann's house is one of hundreds of highly similar houses in large well-known suburban development, and Barbara's is a one of a kind house built from her architects design. Who will benefit more by hiring a realtor to assist in selling her house?

2. We want markets to function efficiently so that flows of funds are not hindered or impaired in the economy since it affects our standard of living. A. State two ways markets can be efficient B. Briefly describe the three forms of informational efficiency.

In the economy of Libro, when 1 million yoga mats are produced each year, the citizens of Libro are willing to give up 9 protein shakes to get one yoga mat. Draw a marginal benefit curve for the economy of Libro that is consistent with this information. Label it. Draw an arrow along the marginal benefit curve to illustrate the change in marginal benefit and change in the quantity of yoga mats as the quantity of yoga mats produced increases. 10- 8- 6- 2- 0 Willingness to pay (protein shakes per yoga mat) ADD A LABEL + Yoga mats (millions per year) 10 Q