In this Assignment, you will evaluate economic problems and opportunity costs to make informed economic decisions to effectively use scarce resources. You will also examine factors that affect production possibilities to determine the maximum possible output, given the resources and the current technology.
Instructions: Answer all of the following questions. You are required to follow proper APA format. Read the Criteria section below for more information before you begin this Assignment.
In this Assignment, you will be assessed on the following outcome:
MT445-1: Evaluate opportunity costs in the business decision-making process.
1. Analyze whether each of the following is primarily a microeconomic or a macroeconomic issue:
Setting the price for a cup of coffee.
- Measuring the impact of tax policies on total household spending in the economy.
- A household's decision regarding whether or not to go on vacation.
- A worker's decision regarding which job to accept.
- Designing government policies to address issues with the social security program.
2. Explain why each of the following is either a positive or normative economic statement.
A 40-cent-per-pack tax on cigarettes will reduce teenage smoking by 10 percent.
The federal government should spend more on diabetes research.
Rising paper prices will increase book prices.
The price of bagels at Bruegger's is too high.
3. Identify the effect of each of the following on the United States Production Possibilities Frontier (PPF). Does it shift inward, outward, or not at all? Briefly explain your answers.
A decrease in the average length of annual vacations.
An increase in immigration of foreign workers to the U.S.
An increase in the average retirement age.
The migration of skilled USA workers to Europe.
4. Identify whether each of the following would increase or decrease the opportunity costs for stay-at-home moms or dads (those who choose not to accept work outside the home). Briefly explain your answers.
a. Higher unemployment rates.
b. Lower average wages.
c. Higher demand for labor.
d. Lower income tax rates on wages earned.