Chapter 1 1. (Rational 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 i. Individuals will consider the benefits of attending college full time and the expected cost of doing so. A benefit of attending college full time would be that it has the potential to increase their wage or salary because of increased knowledgebase, network and skills. The expected cost to consider includes tuition, fees, books and wages that could have been earned by working instead if attending school full time. If the expected benefits of attending college full time outweigh the cost, then the rational person would choose to
…show more content…
What price to charge for an automobile vii. This is a microeconomic issue because it refers to the price of one individual good. h. Measuring the impact of tax policies on total consumer spending in the economy viii. This is considered a macroeconomic issue because it refers to the economy as a whole. i. A household’s decisions about what to buy ix. This is a microeconomic issue because it only refers to the decisions of one individual household. j. A worker’s decision regarding how much to work each week x. This is a microeconomic issue because it only refers to the decisions of one individual worker. 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 home, your expenses will total about $100. If you go to Florida, the airfare, hotel, food and miscellaneous expenses will total about $700. What’s your opportunity cost of going to Florida? (Hint: Answers may vary) k. The opportunity cost of going to Florida is working at home.
5. (Shifting Production Possibilities) Determine whether each of the following would cause the economy’s PPF to shift inward, outward, or not at all: l. An increase in average length of annual vacations i. PPF would shift inward due to less time producing because of longer