1. Give3examplesofimportanttrade-offsthatyoufaceinyourlife.

2. Shouldaneconomicmodeldescribereality exactly?

3. Underwhatconditionsaretheproductionpossibilitiesfrontierlinearratherthan bowedout?

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4. Whatarethedemandschedule andthedemand curve,andhowaretheyrelated? Whydoesthedemandcurveslopedownward?

5. Anincreaseinthedemandfornotebooks raisesthenumber ofnotebooks demanded butnotthequantitysupplied".Isthisstatement trueorfalse?Explain.

6. Apricechangecausesthequantitydemandedofagoodtodecrease by30%,while the totalrevenueofthatgoodincreasesby15%.Isthedemand curveelasticorinelastic? Explain.

7. Your aunt is thinking about opening a hardware store. She estimates that effort costs $500,000 per year to rent the location and buy the stock. In addition, she would have to quit her $50,000 per year job as an accountant. a) Define opportunity cost. b) What is your aunt's opportunity cost of running a hardware store for a year? If your aunt thinks she can sell $510,000 worth of merchandise in a year, should she open the store? Explain.

8. You go out to the best restaurant in town and order a lobster dinner for $40. After eating half of the lobster, you realize that you are quite full. Your date wants you to consume the dinner because you can't take it home and because you've already paid for it. What should you do? Relate your answer to the material in this chapter.

.09) Among monopoly, oligopoly, monopolistic competition, and perfect competition, how would you classify the markets for each of the following drinks? a) Tap water b) bottled water c) Cola d) beer