Module 1 (Chapters 1, 2). Assignment 1-1
Wafa Hammami ID: 120009254
1. The overriding reason why households and societies face many decisions is that
a. resources are scarce.
b. goods and services are not scarce.
c. incomes fluctuate with business cycles.
d. people, by nature, tend to disagree.
2.In most societies, resources are allocated by
a. a single central planner.
b. a small number of central planners.
c. those firms that use resources to provide goods and services.
d. the combined actions of millions of households and firms.
3. A tradeoff exists between a clean environment and a higher level of income in that
a. studies show that individuals with higher levels of income pollute less than low-income individuals.
b. efforts to reduce pollution typically are not completely successful.
c. laws that reduce pollution raise costs of production and reduce incomes.
d. employing individuals to clean up pollution causes increases in employment and income.
4. While pollution regulations yield the benefit of a cleaner environment and the improved health that comes with it, the
regulations come at the cost of reducing the incomes of the regulated firms’ owners, workers, and customers. This
statement illustrates the principle that
a. trade can make everyone better off.
