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Abdullah loves donuts. The table below reflects the value Abdullah places on each donut he eats:

 Value of first donut


Value of second donut


Value of third donut


Value of fourth donut


Value of fifth donut


Value of sixth donut


a.       Use this information to construct Abdullah’s demand curve for donuts.

b.       If the price of donuts is $0.20, how many donuts will Abdullah buy?

c.       Show Abdullah’s consumer surplus on your graph. How much consumer surplus would he has at a price of $0.20?

d.       If the price of donuts rose to $0.40, how many donuts would he purchase now? What would happen to Abdullah’s consumer surplus? Show this change on your graph.

 Question Two:

Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.

 Hours Needed

to Make 1

Quantity Produced

in 2400 Hours















1-      What is Japan’s opportunity cost of one car?

2-      Suppose Korea decides to increase its production of cars by 18. What is the opportunity cost of this decision?

3-       3- In what product Japan has an absolute advantage? and in what product Korea has an absolute advantage ?

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