Microeconomics Homework - Julianna Becker Dr.Hyojin Jeong...

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Julianna BeckerDr.Hyojin JeongECON2600 M/W 11-12:1522 January 2019Homework #1Chapter 1:1.Our wants will always be greater than the limited resources available.5.Labor is both physical and mental talents people contribute to the making of the good whileentrepreneurship is tolanet of organizing resources for the good, not the good directly7.Scarcity causes us to make choices and with that you want to make the choice will the leastamount of opportunity cost so you use a rationing device which then causes competition.8.If you go to a movie you are giving up that time that you could be at home reading orcleaning.10. If opportunity cost is higher, your behavior shows that you are less likely to do it and viceversa14. We make it in relation to marginal costs and benefits, we need to make decisions to makeMB=MC21.Positive economics is the study of “what if”, while normative economics is the study of“what should be”
economic mattersChapter 2:1.A-would cause an outward shift because an increase of cheap labor becoming availablewould increase productionB- would cause an inward shift because resources would be used for battle, aid, or otherwar efforts and people that make up the workforce would be drafted/killed, so you arelosing labor and capital which decreases productionC- would shift outward because it is an increase in resourcesD- wouldnot change the PPF itself because actual production in the country was belowthe PPF when the unemployment rate was high. The decrease in unemployment willexpand actual production back to a level on the PPF efficiently using all resources.E-would cause the production level to underutilize resources or be located at a levelbeneath the PPF because people's skills are being misapplied and underutilized.3. A straight line would need constant opportunity costs, a bowed shape is increasing opportunitycost4. Constant- if you make 1 shirt, the opportunity cost is 1 bookIncreasing- if you make 4 phones, the opportunity cost is 3 cups of coffee5. Because of the law of increasing opportunity cost, the more you make, the higher theopportunity cost6. A-A disagreement between people who favor domestic welfare spending and those who favor

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