Read chapters 1, 2, & 3 and answer Discussion Questions Chapter 1: 1 & 7, Chapter 2: 1 & 10, Chapter 3: 1, 3, & 7
I. What is an opportunity cost? Flow does the idea relate V: the definition of economics? Which of the following decisions would entail the greater opportunity cost. allocating a square I block in the heart of New York City for a surface parking lot or allocating a square block at the edge of a typical suburb for such a lot? Explain. L01.1
7. What are economic resources? What categories do economists use to classify them? Why are resources also called factors of production? Why are they called inputs? 101.5
1. Contrast how a market system and a command economy try to cope with economic scarcity. 102.1 10. In market economies, firms rarely worry about the availability of inputs to produce their products, whereas in command economies input availability is a constant concern. Why the difference? 102.4
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I. Explain the law of demand. Why does a demand curve slope downward? Flow is a market demand curve derived from indi-vidual demand curves? 103.2
3. Explain the law of supply. Why does the supply curve slope upward? How is the market supply curve derived from the sup-ply curves of individual producers? L.03.3
7. What do economists mean when they say “Price floors and ceil-ings stifle the rationing function of prices and distort resource allocation”? L03.8
Textbook McConnell, C. R. & Brue, S. L. (2012) Microeconomics – Principles, problems and policies. 22Lh ed. McGraw-Hill, Irwin. ISBN: 9781264112524
