1-3 (Key Question) Cite three examples of recent decisions that you made in which you, at least implicitly, weighed marginal costs and marginal benefits. • One decision was to wake up early to change the oil in my car. The benefit was that I was able to drive the car with new oil in it. But at a cost to lost time of sleep. Another is skipping church to go to the beach. The benefit was that I got to hangout with friends but at the cost of attending church. Lastly was buying an energy drink at the store. Benefit was that it helped me stay awake longer but at the cost of spending two dollars.
1-5 (Key Question) Indicate whether each of the following statements applies to microeconomics or macroeconomics: a. The unemployment rate in the United States was 4.9 percent in January 2008. -macroeconomics b. A U.S. software firm discharged 15 workers last month and transferred the work to India. -microeconomics c. An unexpected freeze in central Florida reduced the citrus crop and caused the price of oranges to rise. -microeconomics d. U.S. output, adjusted for inflation, grew by 2.2 percent in 2007. -macroeconomics e. Last week Wells Fargo Bank lowered its interest rate on business loans by one-half of 1 percentage point. -microeconomics f. The consumer price index rose by 2.8 percent in 2007. -macroeconomics

1-7 (Key Question) Suppose you won $15 on a lotto ticket at the local 7-Eleven and decided to spend all the winnings on candy bars and bags of peanuts. The price of candy bars is $.75 and the price of peanuts is $1.50. a. Construct a table showing the alternative combinations of the two products that are available. b. Plot the data in your able as a budget line in a graph. What is the slope of the budget line? What is the opportunity cost of one more candy bar? Of