Questions
Scarcity forces society to confront three critical issues. What are those issues and explain how they are related to the problem of scarcity.
Contrast positive and normative economics. How can economists carry out normative analysis?
Suppose that Frank is considering giving Mike eight paperback books in exchange for 2 CDs. Discuss the conditions under which this trade would be mutually beneficial. Also discuss the conditions under which Frank and Mike won't make the trade.
Many resort hotels remain open in the off season, even though they appear to be losing money. Why would they do that?
Economist Milton Friedman is famous for claiming “There is no such thing as a free lunch.” Discuss this comment.
Suppose the wiz-pop market is in long-run equilibrium. Suddenly, fixed costs decrease, although variable costs remain unchanged. Discuss the short-run and long-run changes in market equilibrium.