Mt445 - Managerial Economics Unit 1 Assignment

Unit 1 Assignment

Student Name: Justin Lancaster

Please answer the following questions. Submit as a Microsoft Word® document to the Dropbox when completed.

1. Determine whether each of the following is primarily a microeconomic or a macroeconomic issue:

i. Setting the price for a cup of coffee. Micro

ii. Measuring the impact of tax policies on total household spending in the economy Macro

iii. A household’s decision regarding whether or not to go on vacation Micro

iv. A worker’s decision regarding which job to accept Micro

v. Designing government policies to address issues with the social security program Macro

2. Determine whether each of the following is a positive or normative economic statement.

i. A 40-cent-per-pack tax on cigarettes will reduce teenage smoking by 10 percent. Positive

ii. The federal government should spend more on diabetes research. Normative

iii. Rising paper prices will increase book prices. Positive

iv. The price of bagels at Bruegger’s is too high. Normative

3. Determine whether each of the following would cause the United State’s PPF to shift inward, outward, or not at all:

i. A decrease in the average length of annual vacations Inward

ii. An increase in immigration of foreign workers to the U.S. Outward

iii. An increase in the average retirement age Outward

iv. The migration of skilled workers to Europe Not at all

4. Determine whether each of the following would increase or decrease the opportunity costs for stay-at-home moms or dads (those who choose not to accept work outside the home). Briefly explain your answers.

a. Higher unemployment rates.

Increase.

b. Lower average wages.

Increase

c. Higher demand for labor.

Decrease

d. Lower income tax rates on wages earned.

Decrease

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