Econ Week 1 Assignment

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Week 1 Assignment

Chapter 1  3 & 7

  1. a. What method is used to ration goods in a market economy? How does this rationing method influence the incentive of individuals to supply goods, services, and resources to others?
  2. 3. How are grades rationed in your economics class?  How does this rationing method influence student behavior?  Suppose the highest grades were rationed to those whom the teachers liked best.  How would this method of rationing influence student behavior?
  3. A restaurant offers an “all you can eat” lunch buffet for $10. Shawn has already eaten three servings, and is trying to decide whether to go back for a fourth. Describe how Shawn can use marginal analysis to make his decision.

Chapter 2 6, 7, 13

  1. If you have a private-ownership right to something, what does that mean? Does private ownership give you the right to do anything you want with the things that you own? Explain. How does private ownership influence the incentive of individuals to a) take care of things, b) conserve resources for the future, and c) develop and modify things in ways that are beneficial to others? Explain.
  2. What is the law of comparative advantage? According to the law of comparative advantage, what should be the distinguishing characteristics of the goods a nation produces?  What should be the distinguishing characteristics of the goods the nation imports?  How will international trade influence people’s production levels and living standards?  Explain.
  1. Two centuries ago, there were more buffalo than cattle in the United States. Even though millions of cattle are killed for beef consumption each year, the cattle population continues to grow while the buffalo are virtually extinct.  Why?
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