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GB 540 Unit 1 Assignment Problems
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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 market features could be introduced to help alleviate the problem. As part of your answer also include a discussion of the risks of introducing market mechanisms in situations where ethical issues are present. Your answer should be approximately two pages long and in APA format.

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