Q. Problem #1: Use 2 goods to construct a production possibilities curve. Explain what a variety of different points on the curve mean. What would make the contract curve or expand? Why is efficiency lost at the boundaries, as while substantially more of 1 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 as well as Watches which is followed by Loose Diamonds and Gemstones, and then Diamonds, Natural. Explain how many natural diamonds are for sale at the moment? Note the wide array of sizes also the diamond's prices. In which sense is there struggle among the sellers in this market? Explain how does that competition influence prices? In what sense is there competition among buyers? Explain how does that competition influence prices?

Problem #2 Part B: Describe what would happen if an outside agency determined the prices eBay could charge.

Problem #3: Read the "LAST word" feature on markets for human organs on Page 66 of your text. Next, select a social problem where free markets are not allowed to function and explain how free market features could be introduced to help improve the difficulty. 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