Q1: Caf Inc Is Producing Two Goods: Cars And Milk

Q1 Caf Inc Is Producing Two Goods Cars And Milk The Following Tabl

Q1. CAF Inc. is producing two goods: cars and milk. The following table gives several points on its production possibility frontier. Cars (1000's/year) Milk (1000's of gallons/ year)

a. Graph this on production possibility frontier. (1.5 Marks)

b. Why is the production possibility frontier downward sloping? Be sure to explain economic intuition behind that fact. (3Marks)

c. Suppose the firm is currently producing 2000 cars and 30,000 gallons of milk. What is the opportunity cost of producing additional 20,000 gallons of milk? (3Marks)

d. Give an example of opportunity cost principle from everyday experiences of economic activities (1.5 Marks)

Q2. A team consisting of three people working on a big project, which involves manual entry of data in a computer, with subsequent processing of these data and making a poster presentation. Naturally, each member of the team has different abilities in performing either task. Amna can make one poster or 400 data entries in a day. Hard-working Zeba can make two posters or 1200 data entries in a day. Artistic Ibraheem can make three posters or 900 entries in a day.

a. Initially, the entire team (each of them having their own personal computer) starts with entering data. How many entries will be made in a day? (2Marks)

b. As the time comes to start making posters, you decide to assign one member of the team to this task. Whom would you choose? Explain why? (2.5Marks)

c. As you make this decision, what is the opportunity cost of each poster made? (1.5Marks)

d. As there is less and fewer data remaining to be entered, another person can shift to making posters as well. Which of the remaining two members of the team will you choose this time? Explain your choice. As a result, what is the opportunity cost of each additional poster you will get? (2Marks)

Q3. Is Economics a science? Why, or why not? As part of your response and explanation, include the definitions of "science" and "economics" as you understand them. (3Marks)

Paper For Above instruction

The discussion of whether economics qualifies as a science is fundamental to understanding how economic knowledge is developed and validated. Economics is often classified as a social science because it studies human behavior in the context of resource allocation, production, and consumption. Unlike natural sciences such as physics or chemistry, which rely heavily on empirical testing through controlled experiments, economics employs a combination of empirical data, theoretical modeling, and logical deduction to analyze economic phenomena.

Science, in its broadest sense, is a systematic enterprise that builds and organizes knowledge in the form of testable explanations and predictions about the universe. Scientific disciplines typically employ rigorous methodologies, empirical evidence, reproducibility, and falsifiability as criteria for verifying knowledge claims. Economics shares many of these characteristics, including the formulation of hypotheses, the use of data collection and statistical analysis, and the development of models to predict economic outcomes.

However, the distinctions between economics and natural sciences are significant. Unlike physics or chemistry, where experiments can often be precisely controlled and variables isolated, economic environments involve numerous variables that are difficult to control and replicate. Human behavior, market dynamics, government policies, and cultural factors influence economic outcomes, making it challenging to establish universal laws or repeatable experiments. Despite these challenges, the scientific approach is evident in economics through the use of models, data analysis, and hypothesis testing to understand patterns and relationships in economic activity.

Supporters argue that economics is a science because it employs systematic methods to analyze economic data, develop theories, and test hypotheses, just like other sciences. The development of macroeconomic models, econometric techniques, and experimental economics exemplify this scientific process. Critics, however, contend that because economic predictions often lack certainty and are influenced by unpredictable human behavior, economics cannot be as exact or empirical as natural sciences.

In conclusion, while economics may not always observe the strict experimental rigor characteristic of natural sciences, it embodies the core scientific principles of systematic inquiry, empirical evidence, and logical reasoning. Its classification as a social science recognizes its focus on human behavior and societal impacts, but it still adheres to many scientific methods in its pursuit of understanding economic phenomena.

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