Mt 455

ssignment

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. Answer: Microeconomic

ii. Measuring the impact of tax policies on total household spending in the economy
Answer : Macroeconomics

iii. A household’s decision regarding whether or not to go on vacation Answer: Microeconomics

iv. A worker’s decision regarding which job to accept Answer: Microeconomics

v. Designing government policies to address issues with the social security program Answer Macroeconomics

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 Answer Positive

ii. The federal government should spend more on diabetes research. Answer: Normative

iii. Rising paper prices will increase book prices. Answer: Normative

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

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

Answer 1. Shift Inward

ii. An increase in immigration of foreign workers to the U.S.

Answer 2. Shift outward

iii. An increase in the average retirement age

Answer 3. Shift Outward

iv. The migration of skilled workers to Europe

Answer 4. Shift Inward

4. Determine whether each of the following would increase or decrease the opportunity costs for stay-at-home moms or dads (those who choose not to accept work outside the home). Briefly explain your answers.

a. Higher unemployment rates.
Opportunity cost decrease on the fact she would have to find day care and the job may payless money.

b. Lower average wages.

c. Higher demand for labor.

d. Lower income tax rates on wages earned.