Chapter 1: Q.22 (page 25)
Can you think of any examples of free goods, that
is, goods or services that are not scarce?
Sunlight, Air, Water, Thoughts are a few examples of free goods.
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Suppose America decide to save more of their incomes. If banks lend this extra saving to business that use the funds to build new factories, how might this lead to faster growth in productivity? Who do you suppose benefits from higher productivity? Is society getting a free lunch?
Give three examples of important tradeoffs that you face in your life.
Describe some of the trade-offs faced by each of the following:
a. a family deciding whether to buy a new car
b. a member of Congress deciding how much to spend on national parks
c. a company president decidingwhether to open a new factory
d. a professor deciding how much to prepare for class
e. a recent college graduate deciding whether to go to graduate school
Macroeconomics is an aggregate of what happens
at the microeconomic level. Would it be possible for
what happens at the macro level to differ from how
economic agents would react to some stimulus at the
micro level? Hint: Think about the behavior of crowds.
Residents of the town of Smithfield like to consume hams, but each ham requirespeople to produce it and takes a month. If the town has a total of people, what is the maximum amount of ham the residents can consume in a month?
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