1. List two economic choices you had to make with in last week. Alfred Marshall said in the 1890s, "economics is the study of man in the ordinary business of life." You must analyze one or two of these choices in terms of the alternatives you gave up.

2. Supply and demand analysis is very useful for explaining and predicting equilibrium price and quantity. Very few managers, however, will ever draw supply and demand curves for a real good or service. Nevertheless, they can observe whether a market is in equilibrium. Suppose a hospital manager measures the market for registered nurses (a factor market) and the price (salary) that employers offer is $40,000 per year. The manager observes that there is a shortfall of 1000 nurses in the metro area. What does this say about the equilibrium salary (price) for nurses? What other evidence could a manager look for to infer whether a market is in equilibrium? What are possible causes of the shortage?