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GB 540 Unit 1 Assignment Problems
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Problem #1: Using either a graph or table (Refer to pages 11-15 for
help with graphs and tables) use two goods to construct a production
possibilities curve. Clearly explain what a variety of different points on
the curve mean. What would make the curve expand or contract? Why
is efficiency lost at the extremes, as when substantially more of one
good and very little of another is produced?
Problem #2 Part A: Go to the internet auction site eBay® at
www.ebay.com and select the category Jewelry and Watches, followed
by Loose Diamonds and Gemstones, and then Diamonds, Natural.
How many natural diamonds are for sale at the moment? Note the
wide array of sizes and prices of the diamonds. In what sense is there
competition among the sellers in this market? How does that
competition influence prices? In what sense is there competition
among buyers? How does that competition influence prices?
Problem #3: Read the “LAST word” feature on markets for human
organs on Pages 98–99 of your text. Next, select a social problem
where free markets are not allowed to function and describe how free