Production Possibility Frontiers: Studying or Socializing?

1. (4 points) Production Possibility Frontiers: Studying or Socializing?a. (1 point) Draw a production possibilities curve for the pleasure you get between hanging with friends and from doing your Economics problem set. Is there a tradeoff between these two? Why? How is the tradeoff shown in your graph?b. (1 point) What happens to the production possibilities frontier if you get a faster computer with economics-problem-set software? What happens if your favorite band comes to town and you know that it would be fun to see them with your friends?c. (2 point) Your parents will make you leave school and stop seeing your friends if you don’t do well in Economics. Show the new PPF. Your Professor allows you to work together on the problem sets. Show the new PPF.2. (4 points) Capitalisma. (1 point) Compare the circuit of production under capitalism with the circuit for your family in producing dinner.b. (2 points) How do capitalists make profits? Use the circuit of production to identify problems they might face.c. (1 point) Why is capitalism an expansive system? Use the circuit of production to identify why capitalists seek new markets for their produce, new technologies of production, and new sources of labor.3. (5 points) The Social and Detail Division of Labor: My neighbors Ted and Janet consume prom dresses, and accounting services. Each can produce both at the following rate (output per day):a. (2 points) Draw production possibility frontiers for Ted and Jane producing the two goods (prom dresses and accounting) without trade. What is the relative price of accounting services and for prom dresses for each?b. (2 points) If Ted and Jane can trade services, in which will each specialize? Show how trade shifts the PPFs for each.c. (1 point) Who gains from trade?4. (4 points) Methodological individualism and social science. Explain the following phenomenon from a perspective of methodological individualism and social science. a. Americans drink coffee; the British drink tea.b. American women wear skirts and dresses to work; men wear ties and jackets..c. Young Americans watch basketball; young people elsewhere watch football (a.k.a. “soccer”).d. People in London ride subways more than do people in Los Angeles.5. (3 points) Why do we have economic growth? Consider the argument made by Thad Williamson, article 3.4 in Real World Micro. Does “more” make us happier? If not, then why do we produce more? In your answer, consider the difference between the circuit of production under capitalism and that under a system of production for use.