Principles of Macroeconomics

QUESTIONS CHAPTER 1 1-1; Explain the economic problem of scarce resources and unlimited wants 1. (Definition of Economics) What determines whether or not a resource is scarce? Why is the concept of scarcity important to the definition of economics? 1-2 Describe the forces that shape economic choices 2.(Rationa; Self-Interest) Discuss the impact of rational self-interest on each of the following decisions:   a. Whether to attend college full time or enter the workforce full time b. Whether to buy a new textbook or a used one   c. Whether to attend a local college or an out-of-town college 4.(Marginal Analysis) The owner of a small pizzeria is deciding whether to increase the radius of delivery area by one mile. What considerations must be taken into account if such a decision is to increase profitability? CHAPTER 2 2-1 Describe the relationship between choice and opportunity cost 1. ( Sunk Cost and Choice) Suppose you go to a restaurant and buy an expensive meal. Halfway through, despite feeling quite full, you decide to clean your plate. After all, you think, you paid for the meal, so you are going to eat all of it. What’s wrong with this thinking? 2. (Opportunity Cost) You can spend spring break either at home working for $80 per day for five days or go to Florida for the week. If you stay home, your expenses will total $100. If you go to Florida, the airfare, hotel, food, and miscellaneous expense will total about $700. What’s your opportunity cost of going to Florida? 4. (Specialization) Provide some examples of specialized markets or retail outlets. What makes the Web so conductive to specialization? Completed Homework assignment should be at least three to four pages in length. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations. All references and citations used must be in APA style.

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