Reference no: EM133222918

Question 1. Suppose you buy a new car. What is the opportunity cost of doing so?

Question 2. Suppose you decided to study all last week for this exam instead of doing anything fun. What was the opportunity cost of doing so? Why might the opportunity cost (defined in terms of fun lost) be expected to increase?

Question 3. Suppose you hear a political candidate claim credit or lay blame for an economic outcome. How can you tell whether the candidate is correct? What would you need to know?

Question 4. If you get a 25 percent pay increase, you are better off. Explain why some people would not be better off if their employer gave them a 25 percent pay increase.

Question 5. Suppose you were to analyze the state and the economy at the moment. You say to your friends, "The economy has been growing more slowly in the last 10 years than it did in the previous 20 years. The government should cut taxes to stimulate the economy." What portion of that statement is "positive" and what portion of that statement is "normative?"