Changes

4.  Do you think that government policy should give high priority to the Lorenz curve?  Explain the issue that a Lorenz curve addresses, and whether you think that should be a high priority of government economic policy.

4.  Do you think that government policy should give high priority to the Lorenz curve?  Explain the issue that a Lorenz curve addresses, and whether you think that should be a high priority of government economic policy.

5. Look again at Figure A.  What is the opportunity cost of shifting production from B to C?  

5. Look again at Figure A (on p.3).  What is the opportunity cost of shifting production from B to C?  

6. Review:  explain again what AFC, AVC and ATC are, and how they relate to each other.  When should a firm shut down in the short run?

6. Review:  explain again what AFC, AVC and ATC are, and how they relate to each other.  When should a firm shut down in the short run?

7. What is needed to reach point D in Figure A?  (In other words, what causes a production possibilities curve to shift outward?)

7. What is needed to reach point D in Figure A (on p.3)?  (In other words, what causes a production possibilities curve to shift outward?)

===Honors:===

===Honors:===

Answer 3 out of 4 questions below:

Answer 3 out of 4 questions below:

8.  Look again at Figure C in the lecture (the first graph in this Lecture).  At what point is total revenue maximized?

8.  Look again at Figure C (on p.1) in the lecture (the first graph in this Lecture).  At what point is total revenue maximized?

9.  Explain why the production possibilities curve is convex (opening downward like the top of a circle) rather than concave (opening upward like the inside of a bowl) or a straight line.

9.  Explain why the production possibilities curve is convex (opening downward like the top of a circle) rather than concave (opening upward like the inside of a bowl) or a straight line.