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Auburn ECON 2020 - Assignment 2 Micro

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Assignment 2 1. According to Dr. Williams, in order to obtain more of something, what is required? - Dr. Williams states that in order to get more of something, it requires the sacrifice of something else. Nothing is free. 2. Is there such a thing as “free” libraries or “free” schools according to Williams? Why or why not? - William states that even though Consumers of these places may enjoy them at no price, but that doesn't mean they're free. If money wasn’t saved up for public libraries, schools and medical services, those savings would be available for something else. That "something else” sacrificed is the cost of public libraries, schools and medical services. 3. According to Dr. Williams re-wording of the law of demand: a. complete the following: the higher the price (cost) of something the _less____ we take of it. The lower the price (cost), the ___more____ we take of it. b. No question c. Due to the above, list at least two things that might be expected to happen if the price of oil falls: i. People may start to travel more ii. People may start to purchase more gas 4. According to Williams, a. if there were not scarcity, would there be economic issues (yes/no)? - no economic issues b. Fill in the blank--Scarcity simply means we all want __more____ of something but there ____are not_____ enough resources on earth to satisfy every want.5. Rather than use violence to decide who gets things, Williams said that the more preferred method is the “market mechanism.” According to him, who gets things using the market mechanism? ● Williams says that the people who are willing to bid the highest price gets the most out of using market mechanism. Also, identify whether the following are more closely associated with Micro or Macro economics 1. __Macro_____ The unemployment rate in the US was 4.5% in June 2018. 2. ___Macro___The US inflation rate rose by 1.5% last year. 3. ___Micro___An unexpected plant fungus reduced the crop of tomatoes in California to decrease by one half. 4. __Micro_____Coca Cola corporation decides to introduce a major new diet drink to the market. 5. _Macro___US Tariffs on imported goods form China were increased by 10% in 2018. 6. ___Micro_________Jim’s hours were cut at work. He will discuss how this might impact his family’s budget with them at dinner tonight. *Also, make sure that you have reviewed the concepts of Positive or Normative statements. From the following, explain whether or not they would be positive or normative statements. 1. __Normative statement (judging the temperature in the room)__The temperature in your room is too warm. 2. _Positive statement (stating a fact about what the temperature is in the room)__The temperature in your room is 82 degrees Fahrenheit. 3. _Normative statement (another opinion, everyone may not think they are too high)___US Federal taxes on the highest income earners are too high. 4. _Positive statement (this is fact based, could look this up and it be true)__US Federal taxes on the highest income earners are currently set at 37%. 5. _Normative statement (states what it “should” be, not what it is)__US minimum wage should be at least $15 per hour.6. __Positive statement (this is a true, factual statement on minimum wage)_The current US minimum wage for most workers is $7.25 per hour. ● Explain/provide an example of how in your life you have achieved or attempted to achieve a level of 'efficiency' or 'efficient use of resources' as defined in your notes/text. ● Efficiency- how well something done ● Effectiveness- how useful something is ● My first thought for an example was my car. While it may be very effective to transport from place to place and go long distances, but my car does transport people efficiently due to how it uses


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