Examples Of Important Trade Offs

1387 Words Dec 10th, 2015 6 Pages
Gino Palummo
Microeconomics Final
Due: 12/12/15

1. Examples of important trade-offs that I face in my life… - To go out with my friends or to stay in and study. - Whether to take a nap or do my homework. - To buy a new car or to save my money.
2. a) Economists make assumptions to simplify a complicated world to make it easier to understand and to focus our thinking to the importance of the problem. If we focus on what we are really looking for it will make coming up with a solution much easier. b) Economists sometimes offer conflicting advice to policy makers because each economist might have a different view on any situation depending on their religion, political view, etc. c) An economic model cannot describe reality because it would be too hard to understand. A model is simplified to show what is the most important.
3. a) No, economic output did not start growing faster than the population from the beginning of the human inhabitation of the earth because rapid and sustained economic growth is a modern phenomenon. b) Modern economic growth began with the Industrial Revolution in 1760. c) No, all of the world’s nations did not experience the same extent of modern economic growth because the vast differences in living standards seen today between rich and poor countries are almost entirely the result of the fact that only some countries have experienced modern economic growth.
4. a) The difference between macroeconomics and microeconomics is that…

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