1. Define economics. Explain briefly how the economic way of thinking in terms of rational, self-interested people responding to incentives relates to each of the following situations. (5 points) a. A student deciding whether to purchase a text- book for a particular class b. Government officials seeking more funding for mass transit through higher taxes C. A municipality taxing hotel guests to obtain funding for a new sports stadium 2. In a single sentence, contrast microeconomics and macroeconomics. Next, categorize each of the following issues as a microeconomic issue, a macroeconomic issue, or not an economic issue. In a sentence explain why? (10 points) a. The national unemployment rate b. The decision of a worker to work overtime or not C. A family's choice to have a baby d. The rate of growth of the money supply . The national government's budget deficit A student's allocation of study time across two subjects 3. Define opportunity cost. What is your opportunity cost of attending a class at 11:00 A.M.? How does it differ from your opportunity cost of attending a class at 8:00 A.M.? (5 points)