Unit 1

Unit 1 Assignment

Student Name:

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.

Microeonomic

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

Macroeconomic

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

Microeconomic

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

Microeconomic

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

Macroeconomic

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.

Normative

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

Positive

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

Outward

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

Outward

iii. An increase in the average retirement age

Inward

iv. The migration of skilled workers to Europe

Inward

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.

It would decrease the opportunity costs because there are fewer positions available, therefore less opportunity for them to earn an income outside the...