Intro to Econ Microeconomics (ECON-1102-005) Assignment #1 (10%), Due January 26, 2024, 5 PM. Part I: Answer the following questions carefully and write the correct answer among the given choices. 1. Henry decides to spend two hours swimming at the beach rather than working at his job, which pays $16 per hour. 'What is Henry's tradeoft? a. the $32 he could have earned working for two hours b. nothing, because he enjoys going to the beach more than working c. the increase in skill he obtains from swimming for those two hours d. nothing, because he spent $32 on new swim shorts 2. What happens when government policies such as the welfare system try to help the neediest members of society? a. It increases equity and reduces efficiency. b. It reduces charitable contributions in an economy. c. It increases the productivity of the needy in society. d. It causes market failure to occur. 3. Montana decides to spend three hours working overtime rather than watching Netflix with her friends. She earns $15 an hour. What is her opportunity cost of working? a. the $45 she earns working b. the $45 minus the enjoyment she would have received from watching Netflix c. the enjoyment she would have received had she watched Netflix d. nothing, because she would have received less than $45 of enjoyment from Netflix 4. What does making decisions \"at the margin\" mean? a. that people make those decisions that do not impose a marginal cost b. that people evaluate how easily a decision can be reversed if problems arise c. that people compare the marginal costs and marginal benefits of each decision d. that people always calculate the marginal dollar costs for each decision 5. What is the best example of a marginal change? a. After graduating from university, Makena's income increases from $1000 per month to $5000 per month. b. A firm can produce 5 goods an hour when one worker is working. But the same firm can produce 12 goods an hour when a second worker is hired. . Housing prices in an area increased by 20 percent when a new highway connected a small city to the provincial capital. d. A hard freeze wipes out half of the grape crop in Ontario and the price of Ontario wine doubles. 6. Jay has spent $2400 purchasing and repairing an old tractor, which he expects to sell for $4000. He discovers that he needs an additional repair, which will cost $600. He can sell the tractor as it is now for $1200. What should he do? a. He should take the $1200. b. He should never sell something for less than it cost. . He should complete the repairs and sell the tractor. d. It doesn't matter which action he takes; the outcome is the same either way. 7. Larissa has spent $480,000 purchasing and repairing an old century home, which she expects to sell for $520,000. She discovers that she needs an additional repair, which will cost $80,000. She can sell the house as it is now for $460,000. What should she do? a. She should take the $460,000. b. She should never sell something for less than its cost. Page 1 Intro to Econ Microeconomics (ECON-1102-005) Assignment #1 (10%), Due January 26, 2024, 5 PM. c. She should complete the repairs and sell the cabin. d. It doesn't matter which action she takes; the outcome is the same either way. 8. In a market economy, what guides economic activity? a. the government b. businesses c. central planners d. prices 9. To what extent does the invisible hand model of a market ensure equity and efficiency? a. The invisible hand always ensures both equity and efficiency. b. The invisible hand cannot ensure either equity or efficiency. c. The invisible hand is more effective at ensuring efficiency than it is at ensuring equity. d. The invisible hand is more effective at ensuring equity than it is at ensuring efficiency. 10. What is a primary function of prices in a market economy? a. to provide participants with economic information b. to provide participants with spending limits c. to provide participants with accounting capabilities d. to provide participants with an equitable distribution of goods 11. What is one necessary role of government in a market economy? a. to tax goods and services that are most desired by consumers