Question

1. Explain why seniors often earn lower grades in their last semester before graduation (hint: incentive problem).

2. Analyze the difference between macroeconomics and microeconomics (written response). Determine whether each of the following is primarily a macroeconomic issue or a microeconomic issue (answer only).

A) What price to charge for a TV

B) Tax reform on total consumer spending in the economy

C) Your family's decisions about what to purchase

D) A contractor's decision regarding how much to work each week

E) Government policy to increase employment

3. What is the difference between a positive economic statement and a normative economic statement? Determine whether each of the following is primarily a positive economic statement or normative economic statement:

A) The current unemployment rate is below 4% in 2018

B) The inflation rate in the United States is too low

C) The Government should increase the minimum wage

D) U.S. trade restrictions cost consumers $125 billion annually

Answer 1

1.Seniors tend to obtain lower grades in their final semester of school because to them, the advantage of working hard & obtaining high grades for that single semester isn’t greater than the cost of applying the effort. There is usually no incentive to persuade seniors to work hard in their final semester, as it’s likely not going to alter the result of their graduation. This is an instance of marginal thinking.

2. Microeconomics studies economics at an individual level/ group level / firm level. Macroeconomics, in contrast , is the study of the entire national economy. Microeconomics concentrates on concerns which impact individuals & firms.

a)Microeconomics

b)Macroeconomics

c)Microeconomics

d)Microeconomics

e)Macroeconomics