Assignment Instructions/ Description
Discussion questions and answers/paragraph format: Please include a source/citation for each question
1. What is an opportunity cost and how does the idea relate to the definition of economics? What are the differences between macroeconomics and microeconomics?What are unemployment and inflation and how do these concepts relate to economic growth?
2. What are the main characteristics of the market system?How does the market system answer the five fundamental questions?What are the mechanics of the circular flow model?
3. What is the difference between supply and quantity supplied? What is the difference between demand and quantity demanded?How do prices, quantity supplied, quantity demanded, supply, and demand interact to determine market equilibrium?How do government-set prices, such as price ceilings and price floors, cause surpluses and shortages?
4. How do rational consumers maximize utility by comparing the marginal utility-to-price ratios of all the products they could possibly purchase?What is the relationship between total utility, marginal utility, and the law of diminishing marginal utility?
5. What are the major categories of Federal government spending and revenue and of state/local government spending and revenue?How can you use the circular flow diagram to illustrate how the allocation of resources is affected by the government's revenue and expenditure decisions?
6. Why do economists focus on GDP, inflation, and unemployment when assessing the health of an entire economy?Why does greater flexibility of prices as time passes cause economists to utilize different macroeconomic models for different time horizons?
7. Watch the "Introduction to Macroeconomics" video located in the Week 1 Electronic Reserve Readings.Consider the following as you watch:
- In this segment Timothy Taylor introduces the concept of macroeconomics. What are main topics covered by the lessons shown in the video?
8. Recall the readings and activities you have completed this week and describe the one or two points that were least clear to you. What questions do you have that would help you understand these points better? (Just mention any of the following topics that were discussed up above).
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