Essay about Macroeconomics Assignment Chapters 1 and 2

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MacroEcon 1000 WW Module 1 Assignment 6/10/2014 1. Economics provides a range of choices to decision makers regarding the outcomes or impacts of alternative courses of action. Describe the two types of economic analysis (see examples on the bottom of page three). Come up with three questions of your own as examples for each type of analysis, that relates to you or your community. Positive Analysis = focuses on facts and statistics, cause and effect, theory development and inferences made from specific data, consequences of certain actions, etc. Answers the question ‘what is’ or ‘what will be’. - If the government raises the tax on beer, will it lead to a fall in profits of the brewers? - How will a reduction in income tax…show more content…
e. Production possibilities curve – a graph that shows the possible combinations of 2 products that can be produced while fully employing all of its resources. The line is the constraint, if a point lies inside the line resources are not fully employed, and if its outside the line it is attainable. f. Principle of diminishing returns – the concept that if you increase a resource, and hold all the other constant, eventually the marginal product will decline. Example: my Micro professor demonstrated an example of having one person staple as many pieces of paper in half as they could in a minute, then he added another person, still one stapler, still one minute, then he continued to add more and more students while keeping all other variables the same. While the marginal product increased from 1 to 2 to 3 students, it began to decline or diminish as more students were added. g. Real Value- is an adjusted nominal value, it looks at the value of what a certain amount of money can buy versus it’s face value. h. Human capital – is the resource of knowledge, abilities and experiences of people. Example: To be an author, you must learn to write, edit, learn the proper grammar and spelling standards, etc. i. Natural Resources – resources produced with out the help of man (naturally) to be used for the production of goods and services. Example: oil, water, wood, gas deposits, rock,
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