Economics and Opportunity Cost

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Chapter 1
1.)How does the study of economics depend upon the phenomenon of scarcity? Economics is how people make choices under the conditions of scarcity. Scarcity just means limited, you have to pay to have running water or bottled water, and it is scarce. What this means is that everything has a price, and nothing is free in this economic. Economics depends upon the phenomenon of scarcity because if the world didn’t have to pay for the thing that we need then the world will be very different if there wasn’t prices for everything then we will always be low on supplies. That is way we have a price for everything so that the supplies will not be low and that is why the supplies price rises every so often.

2.)Define opportunity cost. What is the opportunity cost to you of attending college? What was your opportunity cost of coming to class today? The opportunity cost of an item is what you give up to get that item. I’m not really sure what opportunity cost of coming to class today, but once in done I’m sure I will know the opportunity cost it took to come to class. I don’t really think I had an opportunity cost to coming to class because I don’t work at the moment and I am trying to better myself.

Chapter 2

3.)Identify each of the following topics as being part of microeconomics or macroeconomics: A. the impact of a change in consumer income on the purchase of luxury automobiles...Microeconomics B. the effect of a change in the price of Coke on the purchase of Pepsi…Microeconomics C. the impact of a war in the Middle East on the rate of inflation in the United States…Macroeconomics D. factors influencing the rate of economic growth…Macroeconomics E. factors influencing the demand for tractors…Microeconomics F. the impact of tax policy on national saving…Macroeconomics 4.) Which of the following statements are positive and which are normative?
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