ECON 2106 – Principles of Microeconomics – Sapling
Assignments
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HW1: HOMEWORK – CH. 1: WELCOME TO ECONOMICS
1. Determine which individuals face scarcity and which do not.
Faces scarcity Does not face scarcity
The President of the United States
Factory workers
Chief executive officers
Babysitters
Wall Street investors
College students
Your professor
Children
2. Britney, Joan, Les, and Danny are trying to form a band. They each have
some basic skills on most instruments, so their current plan is for each
of them to rotate among vocals, guitar, bass, and drums. After a year of
practice and rehearsals the band still sounds awful. Britney cannot keep
a steady beat when on bass or drums, Less sounds terrible on
everything except the base, nobody except Joan can remember all the
chords on guitar, and even Danny’s own mother thinks his singing
sounds like a dying cow. At their current rate, they expect it will be
several years before they are good enough to land their first paid
performance. None of them have enough money saved up to last that
long.
They all know you are taking economics and ask your advice. What
would you say to them?
Have each member specialize in the tole that they are best in to take
advantage of benefits from specialization
, 3. What key economic concept is the graph demonstrating?
Economies of scale
4. Let’s say that you are in the market to purchase an already built house.
Sort the items below into the correct bin based on whether the
statement reflects something you need to know in order to purchase a
house.
Things you need to know Things you don’t need to know
Your monthly income, expenses, and How to place anchor bolts into the
savings. house’s foundation.
The price of the house, How to make the kitchen plumbing
work.
How to wire the house for electricity.
How to keep the living room’s color
from clashing with the bathroom’s.
5. Which of the following questions would be studied in the area of
microeconomics?
What determines the number of hours an individual works?
6. Fiscal policy is conducted by ___ and involves ___.
,The federal government; government spending and taxes
7. Sort the following items into boxes based on whether they are examples
of monetary or fiscal policy.
Fiscal Policy Monetary Policy
Increase taxes Increase interest rates
8. An economic theory seeks to explain and predict real-world outcomes,
often within the context of a formalized mathematical model.
Which statement is a major reason why such a theory may not be
successful in this pursuit?
The model’s assumptions are unrealistic and do not adequately describe how
agents behave in the real world
9. Match the economic system with the correct description.
North Korea is a country ruled by the Command economy
dictator Kim Jong-un. All resources
in the economy are owned by the
state and allocated based on his
wishes.
Australia’s economy is marked by Market economy
the private ownership of resources,
along with prices directing their
allocation.
The economy of a small village in the Traditional economy
Amazon rainforest is based on past
methods of production and tradition,
, 10. From an economic context, select the definition of a market.
An institution that brings together buyers and sellers of goods or services
Select all examples of a market
The free-agent signing period in the NFL where players hoping to sign with a
team interact with teams looking for additional players; The New York Stock
Exchange; Trade Joe’s: a grocery store frequented by “foodie” types; A local
farmer’s market
11. Order each of the statements with regard to whether the
economic activities in each statement are more market oriented
(laissez-faire) or command oriented (centrally planned).
Market-oriented activities
Buyers and sellers make all production and consumption decisions
The government attempts to induce certain production and consumption
decisions using monetary incentives
The government regulates some production and consumption decisions
The government makes all production and consumption decisions
Command-oriented activities
12. Why is there no such thing as a completely “free” market?
Every market is subject to the restrictions imposed by those who have the
authority to do so
Which of the following can result from overly burdensome regulations
on markets?
Underground economies that operate outside of the law
13. Identify whether the given items are examples of imports,
exports, or neither. Assume the United States is considered the domestic
country.
Glen lives in the United States and purchases a video game produced in
Japan.
Import
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