Econ 151 Homework Assignment #1Introduction and Definitions Name ___________________________ Provide written answers to the questions below.

Use a separate sheet if necessary. Be sure to answer each question fully. 1. Compute percentage changes out to 1 decimal point from Year 1 to Year 2 for the following: Year 1 Year 2 Apple Harvest 4000 tons 4,250 tons Consumer Price Index 174.8 187.9 Real GDP $10.487 trillion $9.945 trillion Big Macs sold 6,712,483 7,113,567 Number of missionaries 65,290 64,821 Number of members 11,807,457 12,122,385 Average Sacrament Meeting Attendence 228 267 Average NBA points/game 93.8 93.7 Students at BYUI 11,873 12,247

Percentage Change

2a. Determine the equation for the following red set of "X-Y" of data. Do the same for the green and yellow sets Plot all three lines on the same graph on the back of this sheet. 2b. What are the equilibrium values of X and Y when the red and green equations are solved simultaneously? 2c. What are the equilibrium values of X and Y when the red and yellow equations are solved simultaneously? Y1 X1 Y2 X2 Y3 X3 50 0 0 0 425 50 110 100 50 50 345 150 170 200 150 150 265 250 230 300 200 200 185 350 290 400 325 325 105 450 350 500 600 600 25 550 3. What are the three basic questions that every economic society must answer? 4. What are the five problems that influence how the three basic questions are resolved? 5. Adam Smith noted three reasons why a free enterprise economy, once it began, would continue to grow and develop. Diagram or describe those reasons. 6. State the economic decision rule. 7. What is the difference between positive and normative economics? 8. The statement, The distribution of income should be left to the market, is a positive statement. b. an art-of-economics statement. c. a normative statement. d. an objective statement. 9. Given certain conditions, the market achieves efficient results is an example of a a. a positive statement. b. a normative statement. c. an art-of-economics statement. d. a subjective statement. 10. Ponder Question: do people always make rational decisions. How do cognitive biases, framing, not knowing or not using all information keep us from making rational choices?

Econ 151 Homework Assignment #1Introduction and Definitions Name____ANSWER KEY_____________ Provide written answers to the questions below. Use a separate sheet if necessary. Be sure to answer each question fully. 1. Compute percentage changes out to 1 decimal point from Year 1 to Year 2 for the following: Year 1 Year 2 Apple Harvest 4000 tons 4,250 tons Consumer Price Index 174.8 187.9 Real GDP $10.487 trillion $9.945 trillion Big Macs sold 6,712,483 7,113,567 Number of missionaries 65,290 64,821 Number of members 11,807,457 12,122,385 Average Sacrament Meeting Attendence 228 267 Average NBA points/game 93.8 93.7 Students at BYUI 11,873 12,247

Percentage Change 6.3 7.5 -5.2 6.0 -0.7 2.7 17.1 -0.1 3.2

2a. Determine the equation for the following red set of "X-Y" of data. Do the same for the green and yellow sets Plot all three lines on the same graph on the back of this sheet. 2b. What are the equilibrium values of X and Y when the red and green equations are solved simultaneously? 2c. What are the equilibrium values of X and Y when the red and yellow equations are solved simultaneously? Y1 X1 Y2 X2 Y3 X3 50 0 0 0 425 50 110 100 50 50 345 150 170 200 150 150 265 250 230 300 200 200 185 350 290 400 325 325 105 450 350 500 600 600 25 550 2a. Equation 1 : Y=.6X + 50 2b. X=125, Y = 125. 2c. X=3.571, Y=47.857 Equation 2 : Y = X Equation 3 : Y = -0.8X + 45 3. What are the three basic questions that every economic society must answer? What to Produce? How to Produce? For Whom to Produce: 4. What are the five problems that influence how the three basic questions are resolved? Scarcity, Employment Levels, Equity (Rich vs. Poor), Price Stability, and Growth 5. Adam Smith noted three reasons why a free enterprise economy, once it began, would continue to grow and develop. Diagram or describe those reasons. a. Production going up, leads to Employment going up, leads to Income going up, leads to Spending going up, leads to inventories going down, driving production up even further. b. Production going up, leads to Division of Labor going up, driving production up even further. c. Production going up, leads to Capital Expansion going up, driving production up even further. 6. State the economic decision rule. If MB>MC, do it. If MC>MB, dont do it. 7. What is the difference between positive and normative economics? Positive Economics is a focus on what is, what was, and what probably will be. Normative Economics is a focus on what ought, what should, or what can be. You should be able to give examples of both. 8. The statement, The distribution of income should be left to the market, is a positive statement. b. an art-of-economics statement. c. a normative statement. d. an objective statement. 9. Given certain conditions, the market achieves efficient results is an example of a a. a positive statement. b. a normative statement. c. an art-of-economics statement. d. a subjective statement. 10. Ponder Question: do people always make rational decisions. How do cognitive biases, framing, not knowing or not using all information keep us from making rational choices?