Supply and Demand and Key Question
McConnell, Brue, Barbiero 11th Canadian edition Microeconomics
ANSWERS TO END-OF-CHAPTER AND APPENDIX QUESTIONS
Chapter 1
1-3 (Key Question) Cite three examples of recent decisions that you made in which you, at least implicitly, weighed marginal costs and marginal benefits. Student answers will vary, but may include the decision to come to class, to skip breakfast to get a few extra minutes of sleep, to attend college or university, or to make a purchase. Marginal benefits of attending class may include the acquisition of knowledge, participation in discussion, and better preparation for an upcoming examination. Marginal costs may include lost opportunities for sleep, meals, or studying for other classes. In evaluating the discussion of marginal benefits and marginal costs, be careful to watch for sunk costs offered as a rationale for marginal decisions.
.
1-5 (Key Question) Indicate whether each of the following statements applies to microeconomics or macroeconomics: a. The unemployment rate in Canada was 7.0 percent in January 2005. b. A Canadian software firm discharged 15 workers last month and transferred the work to India. c. An unexpected freeze in central Florida reduced the citrus crop and caused the price of oranges to rise. d. Canadian output, adjusted for inflation, grew by 3.0 percent in 2004. e. Last week the Scotia Bank lowered its interest rate on business loans by one-half of 1 percentage point. f. The consumer price index rose by 2.2 percent in 2005. Macroeconomics: (a), (d), and (f) Microeconomics: (b), (c), and (e)
1-7 (Key Question) Suppose you won $15 on a Lotto Canada ticket at the local 7-Eleven and decided to spend all the winnings on candy bars and bags of peanuts. The price of candy bars is $.75 and the price of peanuts is $1.50. a. Construct a table showing the alternative combinations of the two products that
ANSWERS TO END-OF-CHAPTER AND APPENDIX QUESTIONS
Chapter 1
1-3 (Key Question) Cite three examples of recent decisions that you made in which you, at least implicitly, weighed marginal costs and marginal benefits. Student answers will vary, but may include the decision to come to class, to skip breakfast to get a few extra minutes of sleep, to attend college or university, or to make a purchase. Marginal benefits of attending class may include the acquisition of knowledge, participation in discussion, and better preparation for an upcoming examination. Marginal costs may include lost opportunities for sleep, meals, or studying for other classes. In evaluating the discussion of marginal benefits and marginal costs, be careful to watch for sunk costs offered as a rationale for marginal decisions.
.
1-5 (Key Question) Indicate whether each of the following statements applies to microeconomics or macroeconomics: a. The unemployment rate in Canada was 7.0 percent in January 2005. b. A Canadian software firm discharged 15 workers last month and transferred the work to India. c. An unexpected freeze in central Florida reduced the citrus crop and caused the price of oranges to rise. d. Canadian output, adjusted for inflation, grew by 3.0 percent in 2004. e. Last week the Scotia Bank lowered its interest rate on business loans by one-half of 1 percentage point. f. The consumer price index rose by 2.2 percent in 2005. Macroeconomics: (a), (d), and (f) Microeconomics: (b), (c), and (e)
1-7 (Key Question) Suppose you won $15 on a Lotto Canada ticket at the local 7-Eleven and decided to spend all the winnings on candy bars and bags of peanuts. The price of candy bars is $.75 and the price of peanuts is $1.50. a. Construct a table showing the alternative combinations of the two products that