1. Opportunity cost In addition to direct money costs, what were two of your opportunity costs for studying at university? Please answer briefly.

2. Until September 1, the U.S. government paid high benefits to people who were unemployed during the Covid-19 pandemic. In many cases, these benefits were higher than the wages that people had previously received while working. How would you expect that this policy affected the speed of economic recovery in the United States when the pandemic receded during spring and summer? Which of the textbooks first seven principles of economics did this policy neglect to consider?

3. Time is money (opportunity cost): If you value your time at 12 per hour, would you prefer to fly to LCC in 3 hours for 100, or take a train to LCC in 9 hours for 20? Explain your answer, using the numbers.

4. Julija can read either 20 pages of economics or else 30 pages of psychology in one hour. During time that she devotes only to studying, what is Julijas opportunity cost for reading each page of economics?

5. Use the circular-flow diagram to consider each of the following four transactions. For each transaction, answer the three questions below. (Use a graph to think about your answer, but do not submit the graph.)

i. Does each transaction take place in a product market or factor market? (Choose one only.) ii. Which direction does the product or factor flowfrom firms to households or households to firms? iii. Which direction does the payment flow?

a. Sam pays a storekeeper 1 for a loaf of bread.

b. Sally earns 4 per hour for working in a shop.

c. Susan spends 5 to see a film at the cinema.

d. Stuart receives $1,000 in dividend payments from his ownership shares in Microsoft corporation.

6. One common assumption in economics is that the products of different firms in the same industry are indistinguishable.

a. Is this a reasonable assumption for commodity products like bars of gold? Explain your answer.

b. Is this a reasonable assumption for restaurant meals? Explain your answer.