1. Explain Why a tax system can only be made more efficient by being less fair (vice versa). Suppose a government decides to use a Lump Sum tax, would that help improve efficiency or fairness. Answers need to be in own words and you can also provide examples if you want.

2. Based on the 6 common mistakes that lead to irrational economic decision making (see chapter 9). Explain why a person might make each of the following irrational choices: Answers need to include at least the name of the mistake and should also include briefly why you made that choice. a. Mark knows he could get a better job if he moves to another city, but he has not sent off any rsums. b. Sahir overpaid when buying a used car that has turned out to be a lemon. He could sell it for parts, but instead he lets it sit in his garage and deteriorate.

3. Explain the difference between the total utility and marginal utility of eating pizza. When does the total utility of eating pizza start to decline?