Economics is the study of how scarce resources are divided by individuals or societies. There would be no need if we could legally and without harm get the goods or services (food, clothing, housing etc.) we need or want without having to exchange work for money.
2. Define Opportunity cost Opportunity cost is what you have to give up getting what you want in terms of other goods and services.
What is the opportunity cost of attending college? The opportunity cost of attending college is the money you would have made if you worked instead You lose four years of salary in hopes to earn more due to the education you are receiving to make up for the lost wages
What is the opportunity cost of you coming to class today? Me giving up sleep to learn something that will be beneficial in my future career.
3. Identify each of the following topics as being part of microeconomic or macroeconomics.
a. The impact of a change in consumer income on the purchase of luxury automobiles.
b. The effect of a change in the price of Coke on the purchase of Pepsi
c. The impact of war in the Middle East on the rate of inflation in the United States
d. Factors influencing the rate of economic growth.
e. Factors influencing the demands for tractors
f. The impact of tax policy on national savings 4. Which of the