Principles of Microeconomics 7th Edition solutions

Principles of Microeconomics 7
Draw a circular-flow diagram. Identify the parts of the model that correspond to the flow of goods and ser-vices and the flow of dollars for each of the following activities. a. Selena pays a storekeeper $1 for a quart of milk. b. Stuart earns $4.50 per hour working at a fast-food restaurant. c. Shan

Principles of Microeconomics 7
Imagine a society that produces military goods and consumer goods, which well call guns and butter." a. Draw a production possibilities frontier for guns and butter. Using the concept of opportunity cost, explain why it most likely has a bowed-out shape. b. Show a point that is impossible for the ec

Principles of Microeconomics 7
The first principle of economics discussed in Chapter 1 is that people face trade-offs. Use a production possi-bilities frontier to illustrate societys trade-off between two goodsa clean environment and the quantity of industrial output. What do you suppose deter-mines the shape and position of the f

Principles of Microeconomics 7
An economy consists of three workers: Larry, Moe, and Curly. Each works 10 hours a day and can produce two services: mowing lawns and washing cars. In an hour, Larry can either mow one lawn or wash one car; Moe can either mow one lawn or wash two cars; and Curly can either mow two lawns or wash one c

Principles of Microeconomics 7
Classify the following topics as relating to microeco-nomics or macroeconomics. a. a familys decision about how much income to save b. the effect of government regulations on auto emissions c. the impact of higher national saving on economic growth d. a firms decision about how many workers to hire

Principles of Microeconomics 7
Classify each of the following statements as positive or normative. Explain. a. Society faces a short-run trade-off between inflation and unemployment. b. A reduction in the rate of money growth will reduce the rate of inflation. c. The Federal Reserve should reduce the rate of money growth. d. Soci