Principles_of_Macro-Homework_1

Principles_of_Macro-Homework_1 - Principles of...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Principles of Macroeconomics Homework 1 1. One tradeoff society faces is between efficiency and equality. Explain. If the U.S. government redistributes income from the rich to the poor, explain how this action affects equality as well as efficiency in the economy. 2. Define opportunity cost. What is the opportunity cost to you of attending college? What was your opportunity cost of coming to class today? 3. Under what conditions might government intervention in a market economy improve the economy’s performance? 4. Explain how an attempt by the government to lower inflation could cause unemployment to increase in the short-run. 5. Using the outline below, draw a circular-flow diagram representing the interactions between households and firms in a simple economy. Explain briefly the various parts of the diagram. 6 6. Draw a production possibilities frontier showing increasing opportunity cost of hammers in terms of horseshoes.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

Principles_of_Macro-Homework_1 - Principles of...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online