. Explain what Economics is. worth 5 points 1b. DiscussthefivefoundationsofEconomics.Worth5points

2. Identify whether each of the following statements a microeconomic issue or a macroeconomic issue. Worth 5 points.

2a. The national savings rate is less than 2 percent of household income. 2b. Jim was laid off from his job and is currently unemployed. 2c. Apple corporation decides to open up 100 new stores in the next 6 months.

3. Define the term opportunity cost. Worth 5 points 3b. Discuss the opportunity cost of attending college. Worth 5 points

4. Define positive and normative statements. Worth 5 points. 4b. Which of the following statements below are positive or normative? 1. winters in Arkansas are too cold. 2. Everyone should work at a bank to learn the true value of money.

3. The current exchange rate is 0.7 British pounds per US dollar.

5. Imagine that you are planning to visit your family in Chicago. You can take a train or a plane. The plane ticket cost 300 US dollars. Traveling by air takes 2 hours each way. Now another option to get to Chicago would be by taking Amtrak out of NYC that takes 12 hours each way. This form of transportation cost 200 US dollars round trip. Which form of transportation should you use. First calculate the opportunity cost between the two options of travel to Chicago from NYC. Show the math. Worth 10 points

6. Which of the following are competitive markets? Worth 5 points

1. Gas station at a busy interstate exit.
2. A furniture store in an isolated small town
3. A fresh produce stand at a farmers' market

7. Which of the following statements will increase the demands for ice cream? Worth 5 points

1. A decrease in the price of the butterfat used to make the ice cream.
2. A decrease in the price of ice cream
3. An increase in the price of milk used to make ice cream.
4. An increase in the price of frozen yogurt a substitute for ice cream.

7b. Which of the following will decrease the supply of chocolate ice -cream? Worth 5 points

1. A medical report finding that consuming chocolate ice cream precents cancer.
2. A decrease in the price of chocolate ice cream
3. An increase in the price of chocolate, an ingredient used to make chocolate ice cream
4. An increase in the price of whipped cream, a complementary good.

8. The market for ice cream has the following demand and supply schedules. This question is worth a total of 15 points.

Price per quart. quantity demand in quarts quantity supply in quarts 2 100 20

3 80 40

4 60 60

5 40 80

6 20 100

8a. Draw the supply and demand graph and label it. Worth 10 points 8b. What are the equilibrium price and equilibrium quantity in the ice cream market? Worth 2.5 points

8c. If the actual price is $3 per quart, what would drive the market towards equilibrium price., discuss.2. 5 points.

9. What are the fundamentals of perfectly competitive markets, define? worth5points

10a. What are the determinates that shift the demand curve, define and list 4 conditions? Worth 5 points

10b. What are determinates that shift the supply curve, define and list 4 conditions. Worth 5 points

11. Discuss and define 3 key points of Adam Smith's theory. Worth 5 points.

12. The circular flow chart reveals that two main groups in the economy interact to determine what will be Payments to the factors of production, discuss. Worth 5 points.

13. What percentage of the worlds population live in developing economies. Worth 2.5 points 13b. What percentage of the worlds population live in advanced economies? Worth 2.5 points