Economics Assignment #1

1st Year Econ Assignment

Name(s): Student #(s)

Last, First (as printed on your student card)

-in alphabetical order

Oliver, Emma 10106162

Porter, Austin

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Course: Economics 110

Section: 003

Instructor: Professor Ian Cromb

(optional)

Assignment #:1 Grade:_______

A1-1. False. The opportunity cost of going to Ottawa to see an Ottawa Senator’s game is the next best alternative that the sum of the travel and ticket costs could have bought you. For example, the money could have spent on another trip, or it could have been saved. In addition to this, another opportunity cost of going to the Senator’s game would be the next best alternate use of time spent travelling, and time spent at the game. This must also be included in the total opportunity cost.

A1-2. False. The owner of Happy Market still has an interaction with the factor markets that pertain to labour, even though he has no other employees besides himself. He is both a producer and consumer in the factor market illustrated in the Circular Flow of Income and Expenditure.

As the sole proprietor of the business, he interacts with the labour portion of the factor markets by following the blue arrow (to the left of “Factor Markets”), and making payments to himself. As the only worker, he also follows the red arrow (to the right of “Factor Markets”) and provides services to himself. Therefore, he interacts with the factor markets pertaining to labour in two different roles.

A1-3. False. The sentence is not entirely positive because it includes a value judgement at the end. Merely stating that that minimum wage increases the income of those who have minimum wage jobs is logical and can be proven correct and therefore is clearly a positive statement because it is a statement of “what is” true. The next part of the sentence is also positive, stating that increasing the minimum wage also increases unemployment among unskilled...