Economics Chapter
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Chapter 1
1- Rational self interest on:
a. Whether to attend college full time or enter the workforce full time:
Based on the definition of rational self interest, that a person should maximize the benefit expected to be achieved with a given cost or to minimize the cost of achieving a benefit; I would choose to attend college full time because I know that the benefit I get after graduating with a college degree will be worth every penny spent on education. Getting a degree and then getting a job with it would maximize my benefits in this case.
b. Whether to buy a new textbook or a used one:
The reason I need a textbook is to be able to read the contents and use it as required for a specific class, a used textbook contains the same information a new textbook would. Why pay extra money to buy it new when I get what I want by buying it used?
I would maximize my benefit by buying a used textbook!
2- (Resources) To which category of resources does each of the following belong?
a. A taxicab: labor (for the river) but the taxi cab itself is physical capital
b. Computer software: physical capital
c. One hour of legal counsel: labor
d. A parking lot: capital (physical capital)
3- (Micro versus Macro) Determine whether each of the following is primarily a microeconomic or a macroeconomic issue:
a. What price to charge for an automobile? Microeconomic issue
b. Measuring the impact of tax policies on total consumer spending in the economy: Macroeconomic issue
c. A household’s decisions about what to buy: Microeconomic issue
d. A worker’s decision regarding how much to work each week: Microeconomic issue.
Chapter 2
4 -(Opportunity Cost) You can either spend Spring Break working at home for $80 per day for five days or go to Florida for the week. If you stay...
1- Rational self interest on:
a. Whether to attend college full time or enter the workforce full time:
Based on the definition of rational self interest, that a person should maximize the benefit expected to be achieved with a given cost or to minimize the cost of achieving a benefit; I would choose to attend college full time because I know that the benefit I get after graduating with a college degree will be worth every penny spent on education. Getting a degree and then getting a job with it would maximize my benefits in this case.
b. Whether to buy a new textbook or a used one:
The reason I need a textbook is to be able to read the contents and use it as required for a specific class, a used textbook contains the same information a new textbook would. Why pay extra money to buy it new when I get what I want by buying it used?
I would maximize my benefit by buying a used textbook!
2- (Resources) To which category of resources does each of the following belong?
a. A taxicab: labor (for the river) but the taxi cab itself is physical capital
b. Computer software: physical capital
c. One hour of legal counsel: labor
d. A parking lot: capital (physical capital)
3- (Micro versus Macro) Determine whether each of the following is primarily a microeconomic or a macroeconomic issue:
a. What price to charge for an automobile? Microeconomic issue
b. Measuring the impact of tax policies on total consumer spending in the economy: Macroeconomic issue
c. A household’s decisions about what to buy: Microeconomic issue
d. A worker’s decision regarding how much to work each week: Microeconomic issue.
Chapter 2
4 -(Opportunity Cost) You can either spend Spring Break working at home for $80 per day for five days or go to Florida for the week. If you stay...