1.Ashley, Doug, and Mei-Lin are planning to travel from Halifax to Sydney.The trip takes one hour by airplane and five hours by train.The air fare is $100 and train fare is $60.They all have to take time off from work while travelling. Ashley earns $5 per hour in her job, Doug $10 per hour, and Mei-Lin $12 per hour.

Calculate the opportunity cost of air and train travel for each person and put it in the table below.Assuming they are all economizers, how should each of them travel to Sydney?

Traveller

Train

Plane

Ashley

a)Fare

b)Cost of Time

Total cost

Doug

a)Fare

b)Cost of Time

Total cost

Mei-Lin

a)Fare

b)Cost of Time

Total cost

Ashley:__________________________

Doug:___________________________

Mei-Lin:_________________________

2. Are the following situations an example of equilibrium?Why or why not?

a)Although it takes you 30 minutes to get to the school by bus, there is no other alternative transportation that you can take to get there

b) You always fall asleep with the TV on.Today, you receive a letter from the electric company saying that if you use less electricity, then you can get a large discount.

3. In 2020 the Government of British Columbia reformed that province's welfare system.The reform increased the amount of unemployment payments that people would receive if they did not work.

a)How does this reform affect the incentive to work?

b) Is this reform more equal or more efficient?Why?

4. Indicate whether each of the following statements is positive or normative.

a. The government ought to reduce the size of the deficit in order to lower interest rates.

b. Government imposition of a tax on tobacco products will reduce their consumption