1. When Alice went to a movie theatre last time, she had to choose between a romantic movie and an action movie. Eventually she decided to watch the romantic movie. Did Alice face any scarcity in this situation? Economically speaking, what conclusion can be drawn from Alice's choice of the romantic movie over the action movie?

2. Monica likes to spend $30 weekly on movies and burgers. Movie tickets cost $6 each and burgers cost $3 each.

(i) Is she able to watch 3 movies and have 5 burgers in a week given her budget of $30?

(ii) What is the maximum number of burgers she can have in a week given her budget of $30?

(iv) What is Monica's opportunity cost of watching a movie?

(iv) Draw Monica's budget constraint line using the horizontal axis to represent the quantity of movie tickets and the vertical axis to represent the quantity of burgers. Be sure to compute and show the x and y-intercepts. What is the slope of the budget constraint line you have drawn?

3. Sketch a plausible production possibility frontier that shows, in general, various combinations of wheat and potatoes a farmer can produce with the fixed amount of resources available to him. Label your diagram well ( for example, your axes), but you don't have to use any specific numbers.