Microeconomics

Pg. 7 Checkpoint 1.1 Practice problems

1) Our inability to satisfy all of our wants.
2) Safer and better public Schools, cleaner water and air, as well as a tighter
lockdown on terrorism.
3) (With more research) would be a (how) question, and the (we will cure
cancer) is a (what) question. (A good education) would be a (what)
question, (The right of every child) would be a (for whom) question, while
the (Raising taxes) would be a (for whom) questions.
4) By Starbucks deciding putting a new Starbucks there they were thinking
about their own self-interest which also serves their customers self-interest.
Which in turn contributes to the social interest.

In the news
1) The BLS expects all goods and services to increase in quantity by the
workers in said fields over the next five years. For whom depends on the
pricing of goods and services as well as peoples incomes with will change
over the next five years. The BLS also expects that in said jobs and
industries will get more workers.
2) The businesses based their decision on the hiring cuts due to the prices of
gas and food going up. Thus they acted in their own best self-interest. As for
the consumers they acted in their own self-interest by cutting spending when
prices went up.

Pg.16 Checkpoint 1.2 Practice Problems

1) Kates opportunity cost of the third hour of tennis is a 10 percent grade drop.
2) Given the fact that Kate played a third hour of tennis you can conclude that
her marginal benefit did not exceeded the marginal cost of the second hour of
tennis.
3) No! In order for this decision to be rational her marginal benefit must
exceeded her marginal cost of the second hour of tennis.
4) Yes! She wade her decision based on margin by weighing the benefit and cost
of playing one more hour.

In the news
1) Yes! Because spending the time and money on a cruise you will not have
them to spend on other things you may want or need.
2) I would go over the marginal benefit and the marginal cost by comparing
them. I would go everything from the timing to the cost of the trip from the
gift shop money, food money and sightseeing money that may be needed.
3) The MB (marginal benefit) from the cruise would what one is willing to
pay. While the MC (marginal cost) is what how much you would have to
pay for the cruise.
4) Due to a lower price people in general will have a MB (marginal benefit)
that exceeds their MC (marginal cost) and will take the cruise.

Pg.38 Checkpoint 2.1 Practice Problems

1) There are two types of goods and services. They are the consumption goods
and the capital goods. A 16 oz. Starbucks coffee is a consumption good and
getting your trucks breaks fixed is a consumption service. A furniture
factory and cellphones repair company are Consumption goods. An item
bought by an individual or government that is used up in the here and now is
called consumption goods or service. While goods bought by a business or
government to be used over and over again to produce other goods and
services is called Capital goods.

2) Land, labor, Capital, and entrepreneurship are factors of production.

Capital earns interest, Entrepreneurship earns income or incurs loss, labor
earns wages, and land earns rent.
3) The difference between the functional distribution of income and the
personal distribution of income is that the personal distribution of
income show how total income is shared throughout the household(s). While
the functional distribution of income of each factor of production shows
the percentage of total of income received.
4) In 2011 the United States earned 69 percent in the labor field alone. The
labor field is the largest factor or production.

In the news
Almost all Americans make their living by working. And the income form that
labor is called a wage. Many people in Peru are entrepreneurs because the country
is very poor and jobs are very limited compared to America.

Pg. 45 Checkpoint 2.2 Practice problems

1) Goods and services that are produced in developing economies are mostly
agricultural which tends to have the largest percentage. Manufacturing is a
close second with it ever increasing percentage. While services have a small
percentage of total production. People who tend to work in rural industries
are often left behind; while the people who work in factories have incomes
that rise.

2) The Rwandan coffee growers improved their knowledge through using the
technical support; which allowed them to increase their human capital. By
the Clinton Foundation giving them the loan not only did their tech improve
but they were also able to improve their wash stations as well. This changed
their physical capital by allowing the farmers to increase the quantity and
quality of washed coffee.

Pg. 52 Checkpoint 2.3 Practice problems

1) The flows from the circle flows chart model shows that payments for labor
services flow from firms to households through the factor market. While
consumption expenditure flows from households to firms through the goods
market Leaving the purchases of the national defense flow from the goods
market as well.
2) The goods and services that go from firms to households and from firms to
governments through goods markets and the flows of service of factors of
production that go from households to firms through factor markets are the
real flows. While the flows of household and government expenditures on
goods and services, incomes, taxes and transfers are the money flows.