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Sean Faria

ECO2013

Ref # 568927

1. The term utility is the pleasure, happiness, or satisfaction obtained from

consuming a good or service. Purposeful behavior is when people make decisions

with some desired outcome in mind. This means that purposeful behavior is what

people do to get utility.

2. A. The unemployment rate in the United States was 5.2% in January 2005. This is

macroeconomics because it relates to the whole of United States not a small

population or select few.

B. A U.S. software firm discharged 15 workers last month and transferred the

work to India. This is microeconomics because it is pointed at the select few.

C. Last week Wells Fargo Bank lowered its interest rate on business loans by one-

half of 1 percentage point. This is macroeconomics because it’s the entire

business.

D. The consumer price index rose by 3.4% in 2005.This is Macroeconomics

because it is the entire consumer price index for 2005.

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3. Economic resources are all the natural, human, and manufactured resources that

go into the production of goods and services. The categories that economists use

to classify them are Land, Labor, Capital, and Entrepreneurial Ability. These are

the necessary components to create a good or a service that why they are called

factors of production .They are called factor of production or inputs because they

must be combined in or to produce a good or service.

4. A. The quality of education increases will increase the potential production or

curve will shift outward because you will have more workers qualified to work, or

new technology invented which can increase in design or development ideas for

faster and more efficient workers and workers environment.

B. The number of unemployed workers increases would decrease the potential

production and will shift the curve inward. The reason for this is because the

fewer workers you have the less production being done which means less

production goals being met.

C. A new technique improves the efficiency of extracting copper from ore would

increase the potential of production because it would help make the production

faster. So then the production potential curve would shift outward.

D. A devastating earthquake destroys numerous production facilities would

decrease the potential of production because it can cause people to get laid off.
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Also it can cause to shut down business until it is safe to return and repair the

damages. In addition the product facilities that are undamaged will be doing

double work which leads to unhappy working environment.

5. On average, households in China save 40% of their annual income each year,

whereas households in the U.S. save less than 5%. Production possibilities are

growing at roughly 9% annually in China and 3.5% in the U.S.

This means that China will have a better economic growth on the

production of present goods as well as future goods. The reason for this is the

have more funds available to them so more items being purchased or more money

being saved. Either way there product of present goods as well as the future goods

will continue to increase. The United States production of present goods will

steadily decline. I think we can all see that today as we are barely out of economic

struggle. The steady decline of production of present goods will lead to even

fewer future goods being produced. The growth rate will be at a halt sooner or

later if it wasn’t stopped.