Macroeconomics

Macroeconomics

Lesson 1 - Online Assignment (45 points)

1. Economics is a social science concerned with how individuals, institutions, and society make choices under conditions of scarcity. In other words, the wants and needs of society far exceed the resources available to meet those needs; society wants to use these scarce resources as efficiently as possible, so often a cost/benefit ratio will be used to make this decision. (a) Explain the relationship between scarcity and prices. (b) Give an example of when a cost/benefit ratio would be used in the United States. Be specific and name the options considered and give the rationale in determining your choice. (4 points)

2. In 200-300 words, summarize Adam Smith’s invisible hand theory and what contributed to the demise of that theory. (2 points)

3. Define opportunity cost and give an example. (2 points)

4. Land, labor, capital, and entrepreneurial ability are resources that go into producing goods and services. In considering the concept of comparative advantage, name a product or service and the country that would have a comparative advantage in labor, in land, in capital, and in entrepreneurial ability. (4 points)

5. Summarize Say’s Law and name the theory used during the Reagan administration that was a restatement of Say’s theories. (1 point)

6. John Maynard Keynes believed that government intervention in free markets was necessary. This economic theory resulted in a split in the study of economics. Name and define the two broad categories of study that resulted from this split. (2 points)

7. Discuss the different philosophies/characteristics for the different economic systems of Feudalism, Capitalism, Socialism, and Communism. Include the following:

(a) a summary defining each system,

(b) the major leader(s), and

(c) the positive and negative aspects of each system.

Last, give...