Mt445 Assignment
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 because this is technically the decision of an individual’s decision
ii. Measuring the impact of tax policies on total household spending in the economy
Macroeconomic because this is a government decision
iii. A household’s decision regarding whether or not to go on vacation – Microeconomic because again, it is an individual’s decision regarding the household.
iv. A worker’s decision regarding which job to accept – Microeconomic since it is also an individual’s decision.
v. Designing government policies to address issues with the social security program- Macroeconomic because it includes decisions made by the government.
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. Positive statement which states factual and testable information. ii. The federal government should spend more on diabetes research. Normative because it incorporates an opinion.
iii. Rising paper prices will increase book prices.- Positive since it is a statement which is testable.
iv. The price of bagels at Bruegger’s is too high- Normative, again incorporates an individual’s opinion.
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 since longer vacations means less time producing
ii. An increase in immigration of foreign workers to the U.S.- Outward because labor supply increases
iii. An increase in the average retirement age – Outward because people retire later, stop working later. more labor, more productivity
iv.
i. Setting the price for a cup of coffee. Microeconomic because this is technically the decision of an individual’s decision
ii. Measuring the impact of tax policies on total household spending in the economy
Macroeconomic because this is a government decision
iii. A household’s decision regarding whether or not to go on vacation – Microeconomic because again, it is an individual’s decision regarding the household.
iv. A worker’s decision regarding which job to accept – Microeconomic since it is also an individual’s decision.
v. Designing government policies to address issues with the social security program- Macroeconomic because it includes decisions made by the government.
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. Positive statement which states factual and testable information. ii. The federal government should spend more on diabetes research. Normative because it incorporates an opinion.
iii. Rising paper prices will increase book prices.- Positive since it is a statement which is testable.
iv. The price of bagels at Bruegger’s is too high- Normative, again incorporates an individual’s opinion.
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 since longer vacations means less time producing
ii. An increase in immigration of foreign workers to the U.S.- Outward because labor supply increases
iii. An increase in the average retirement age – Outward because people retire later, stop working later. more labor, more productivity
iv.