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.

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. 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.

I am still going to argue that this would be considered a normative statement because it is worded without proven statement or data to support evidence. It is stated in the same way as if I were to say that “an increased cancer scare will reduce teenage smoking by 10 percent”. It is simply an assumption or guess.

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

This is also a normative statement “should” is an opinionated statement frame.

iii. Rising paper prices will increase book prices.

This is a positive statement because it is proven. If the resource cost more than the product price will be higher.

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

This is another normative statement, its an opinion. The next person may be rich and think the price is too low.

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...