assignment

Unit 1 [BU204: Macroeconomics]

Unit 1 Assignment: The Ten Principles of Economics 1. Your Assignment should have a cover sheet with the following information:

● Your Name

● Course Number

● Section Number

● Date

2. You may submit your Assignment using the Unit 1 Assignment template, renaming it as required in item 3

below.

3. Unless otherwise instructed by your instructor, your completed Assignment should be saved with the

following file name format: course number, an underscore, section number, an underscore, your LAST name,

underscore, your FIRST name, an underscore, the unit number, an underscore, and the word “Assignment.” It

will look like this: BU204_section number_LAST_FIRST_ Unit number_ Assignment.

(BU204_2_Smith_Tina_Unit 1_Assignment.docx)

Each scenario below practices one of the Ten Principles of Economics. Match the principles to the appropriate

scenario listed and justify your answer. Each principle will only be used once. Refer to Chapter 1 for the details

on the principles of economics. Also, watch the Chapter 1 “Why Does Economics Matter” Video.

Ten Principles of Economics:

1. People Face Trade-offs.

2. The Cost of Something Is What You Give Up to Get It.

3. Rational People Think at the Margin.

4. People Respond to Incentives.

5. Trade Can Make Everyone Better Off.

6. Markets Are Usually a Good Way to Organize Economic Activity.

7. Governments Can Sometimes Improve Market Outcomes.

8. A Country’s Standard of Living Depends on Its Ability to Produce Goods and Services.

9. Prices Rise When the Government Prints Too Much Money.

10. Society Faces a Short-Run Trade-off between Inflation and Unemployment.

Scenarios

1. Even though generally more expensive, energy efficient appliances and vehicles sell better with a rebate or tax credit. 2. Airlines will charge a fee for each additional suitcase you may want to take with you on a trip. 3. At a restaurant, when ordering an entrée, you get to choose two side dishes from a group of five side dishes. 4. Instead of growing your own food and making other necessities you decide to specialize in a particular profession and purchase things, even things that you would have not been able to make yourself. 5. There is an incredible variety of goods and services available at many different price points even though no single entity or government is deciding or dictating the market what to do. 6. In its effort to limit the effects of rising inflation, the Federal Reserve System reduces the quantity of

Unit 1 [BU204: Macroeconomics]

money in the economy, but sees an increase in unemployment 7. While consuming the same amount of farmers’ labor and capital the newly developed hybrid crops achieve twice the yields of the previous crops. 8. You have noticed that the same amount of money buys you fewer goods and services than it did a year ago. 9. You worked for extra pay on a holiday and therefore missed out on your neighbors’ barbeque. 10. Two major suppliers of powdered baby food formula are challenged by government on grounds of price fixing.

Unit 1 Assignment: The Ten Principles of Economics

Points

Possible

Points

Earned

Correct matching and explanation for each question is worth 3

points.

30

Writing Style, Grammar, and APA Format 5

Total 35