Answers

2. To which category of resources does each of the following belong?

  1. A taxicab
  2. Computer software
  3. One hour of legal counsel
  4. A parking lot
  5. A forest
  6. The Mississippi River
  7. An individual introducing a new way to market products on the Internet

 

3. Explain why each of the following would not be considered "free" for the economy as a whole:

  1. Food stamps
  2. U.S. aid to developing countries
  3. Corporate charitable contributions
  4. Noncable television programs
  5. Public high school education

 

5. Determine whether each of the following is primarily a microeconomic or a macroeconomic issue:

  1. Determining the price to charge for an automobile
  2. Measuring the impact of tax policies on total consumption spending in the economy
  3. A household’s decisions about how to allocate its disposable income among various goods and services
  4. A worker’s decision regarding how many hours to work each week
  5. Designing a government policy to affect the level of employment

 

7. Determine whether each of the following statements is normative or positive:

  1. The U.S. unemployment rate was below 5 percent in 1998.
  2. The inflation rate in the United States is too high.
  3. The U.S. government should increase the minimum wage.
  4. U.S. trade restrictions cost consumers $19 billion annually.

 

9. Discuss the impact of rational self-interest on each of the following decisions:

  1. Whether to attend college full time or enter the full-time workforce
  2. Whether to buy a new or a used textbook
  3. Whether to attend a local college or an out-of-town college

 

11. The owner of a small pizzeria is deciding whether to increase the radius of its delivery area by one mile. What considerations must be taken into account if such a decision is to contribute to profitability?