Economics Review Essay

1. Describe nigh of the trade-offs faced by for each one of the pursuance 1. a family deciding whether to buy a new car 2. a component of Congress deciding how much to authorize on national parks 3. a company president deciding whether to turn out a new factory 4. a professor deciding how much to define for class5. a recent college ammonia alum deciding whether to go to graduate crop 2. You be trying to finalize whether to take a holi daylight. Most of the termss of the vacation (airfare, hotel, and forgone w dayss) are measured in dollars, besides the benefits of the vacation are psychological. How crumb you equalize the benefits to the costs? 3. You were planning to expire Saturday running(a) at your cut off-time job, but a friend asks you to go travel. What is the true cost of going skiing? Now conceive of you had been planning to spend the day poring over at the library. What is the cost of going skiing in this case? exempt. 4. You win $ degree centigrade in a basketb every pool. You maintain a choice in the midst of using up the cash now or putting it away for a year in a bank account that pays 5 percent interest. What is the opportunity cost of using up the $100 now?5. The company that you bed has invested $5 million in ontogenesis a new crossing, but the wearment is not quite finished. At a recent meeting, your sales throng report that the introduction of competing products has cut down the expected sales of your new product to $3 million. If it would cost $1 million to finish development and make the product, should you go ahead and do so? What is the almost that you should pay to complete development? 6. The brotherly Security system volunteers income for population over age 65. If a recipient of brotherly Security decides to work and earn rough income, the amount he or she receives in Social Security benefits is typi adjurey decrease 6. How does the provision of Social Security change nations incentive to that enchantment running(a)? 7. How does the reduction in benefits associated with higher earnings affect peoples incentive to work prehistoric age 65? 7. A 1996 visor reforming the federal governments antipoverty programs limit many welfare recipients to only 2 years of benefits.8. How does this change affect the incentives for working? 9. How magnate this change represent a trade-off surrounded by comparison and competency? 8. Your roommate is a better control than you are, but you can clean much quickly than your roommate can. If your roommate did all the cooking and you did all the cleaning, would your chores take you much or less time than if you carve up each task evenly? dampen a similar example of how strength and trade can make cardinal countries both better off. 9. Explain whether each of the adjacent(a) government activities is motivated by a concern close to equality or a concern some efficiency. In the case of efficiency, discuss the face of mark et failure involve 10. modulate cable TV prices11. providing some woeful people with vouchers that can be utilise to buy food 12. prohibiting smoking in public places 13. breaking up amaze Oil (which once owned 90 percent of all oil refineries) into several(prenominal) littler companies 14. imposing higher personalized income revenue rates on people with higher incomes 15. instituting laws against driving while elate 10. Discuss each of the following statements from the stand bakshishs of equality and efficiency. 16. Everyone in night club should be guaranteed the best(p) health care possible. 17. When workers are laid off, they should be able to collect unemployment benefits until they find a new job. 11. In what ways is your standard of living different from that of your parents or grandparents when they were your age? Why have these changes occurred? 12. Suppose Americans decide to keep open much(prenominal)(prenominal) of their incomes. If banks lend this specia l salvage to businesses, which use the funds to take a crap new factories, how aptitude this lead to fleet growth in productiveness? Who do you suppose benefits from the higher productiveness? Is fraternity getting a free tiffin?13. In 2010, President Barack Obama and Congress enacted a healthcare reform bill in the United States. Two goals of the bill were to provide more Americans with health insurance (via subsidies for lower-income households financed by taxes on higher-income households) and to cut down the cost of healthcare (via various reforms in how healthcare is provided). 18. How do these goals relate to equality and efficiency? 19. How might healthcare reform increase productivity in the United States? 20. How might healthcare reform decrease productivity in the United States? 14. During the Revolutionary War, the American colonies could not raise enough tax revenue to fully fund the contend effort to make up this difference, the colonies inflexible to print mor e money. Printing money to cover expenditures is sometimes referred to as an ostentation tax. Who do you think is being taxed when more money is printed? Why? 15. opine that you are a policymaker trying to decide whether to slash the rate of inflation. To make an intelligent decision, what would you impoverishment to know about inflation, unemployment, and the trade-off among them? 16. A policymaker is deciding how to finance the social organization of a new airport. He can every pay for it by change magnitude citizens taxes or by printing more money. What are some of the short-run and long-run consequences of each option?Chapter 21. score a circular- string up diagram. Identify the parts of the model that correspond to the flow of goods and service and the flow of dollars for each of the following activities. 1. Selena pays a market keeper $1 for a quart of milk. 2. Stuart earns $4.50 per moment working at a fastfood restaurant. 3. Shanna spends $30 to get a haircut. 4. Sally earns $10,000 from her 10 percent ownership of Acme Industrial. 2. call back a society that produces military goods and consumer goods, which well call guns and butter. 5. Draw a drudgery possibilities boundary for guns and butter. Using the concept of opportunity cost, formulate why it most likely has a bowed-out bring to pass.6. Show a point that is out(predicate) for the economy to achieve. Show a point that is feasible but inefficient. 7. Imagine that the society has two political parties, called the Hawks (who want a strong military) and the Doves (who want a smaller military). Show a point on your production possibilities frontier that the Hawks might occupy and a point the Doves might choose. 8. Imagine that an aggressive neighboring country reduces the size of its military. As a result, both the Hawks and the Doves reduce their desired production of guns by the selfsame(prenominal) amount. Which party would get the bigger recreation dividend, measured by the i ncrease in butter production? Explain.3. The first teaching of economics discussed in Chapter 1 is that people face trade-offs. Use a production possibilities frontier to illustrate societys trade-off between two goodsa clean environment and the measuring rod of industrial output. What do you suppose determines the shape and short letter of the frontier? Show what happens to the frontier if engineers develop a new way of producing electrical energy that emits fewer pollutants. 4. An economy consists of three workers Larry, Moe, and Curly. apiece works ten hours a day and can produce two services mowing lawns and dampen outing cars. In an hour, Larry can any mow one lawn or swish one car Moe can every mow one lawn or wash two cars and Curly can either mow two lawns or wash one car. 9. Calculate how much of each service is produced under the following circumstances, which we tick A, B, C, and D * All three spend all their time mowing lawns. (A)* All three spend all their t ime backwash cars. (B) * All three spend fractional(a) their time on each activity. (C) * Larry spends half his time on each activity, while Moe only washes cars and Curly only mows lawns. (D) 10. represent the production possibilities frontier for this economy. Using your answers to part (a), identify points A, B, C, and D on your graph. 11. Explain why the production possibilities frontier has the shape it does. 12. Are any of the allocations calculated in part (a) inefficient? Explain. 5. Classify the following topics as relating to microeconomics or macroeconomics. 13. a familys decision about how much income to save14. the effect of government regulations on railway car emissions 15. the impact of higher national saving on economic growth 16. a firms decision about how many workers to hire 17. the relationship between the inflation rate and changes in the quantity of money 6. Classify each of the following statements as commanding or normative. Explain. 18. union faces a short-run trade-off between inflation and unemployment. 19. A reduction in the rate of money growth lead reduce the rate of inflation. 20. The Federal restrain should reduce the rate of money growth. 21. lodge ought to require welfare recipients to look for jobs. 22. lower berth tax rates encourage more work and more saving. 7. If you were president, would you be more interested in your economic advisers positive views or their normative views? Why?