Chapter 1: Q 1.2 (page 1)
Identify the three basic economic questions and the two opposing sets of answers.
The three questions are,
The two opposing sets of answers are,
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State whether each of the following functions specifies a direct or an inverse relationship.
a. y = 5x
b. y = 10 - 2x
c. y = 3 + x
d. y = −3x
Why do you suppose that economists sometimes disagree about whether to classify freelancers who provide paid consulting services to businesses as "workers" or "firms"?
Consider the following statements, based on a positive economic analysis that assumes that all other things remain constant. For each, list one other thing that might change and thus offset the outcome stated.
(a) Increased demand for laptop computers will drive up their price.
(b) Falling gasoline prices will result in additional vacation travel.
(c) A reduction of income tax rates will result in more people working.
Could it be the case that chicken farmers who have both humanitarian and profit motives for keeping their chickens comfortable nonetheless are fully "self-interested"? Explain.
In a single sentence, contrast microeconomics and macroeconomics. Next, categorize each of the following issues as either a microeconomic issue, a macroeconomic issue, or not an economic issue.
(a) The national unemployment rate.
(b) The decision of a worker to work overtime or not.
(c) A family’s choice to have a baby.
(d) The rate of growth of the money supply.
(e) The national government’s budget deficit.
(f) A student’s allocation of study time across two subjects.
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