Unit 1 Assignment

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Assignment: Basic Economic Principles

Student Name: Krystal Taylor

In this Assignment, you will evaluate economic problems and opportunity costs to make informed economic decisions to effectively use scarce resources. You will also examine factors that affect production possibilities to determine the maximum possible output, given the resources and the current technology.

Instructions: Answer all of the following questions. You are required to follow proper APA format. Read the Criteria section below for more information before you begin this Assignment.

In this Assignment, you will be assessed on the following outcome:

MT445-1: Evaluate opportunity costs in the business decision-making process.

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

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

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. Explain why each of the following is either a positive or normative economic statement.

i. A 40-cent-per-pack tax on cigarettes will reduce teenage smoking by 10 percent. Positive economic statement because it is based on facts. The fact is if the 40-cent-per-pack tax will reduce smoking by 10 percent, it could reduce the number of teenagers that smoke.

ii. The federal government should spend more on diabetes research. Normative economic statement because it has no supporting facts as to why the federal government should spend more on research for diabetes.

iii. Rising paper prices will increase book prices. Normative economic statement because it is suggesting...