1. What is wrong with the statement “Economics is everything to do with money”?

2. Does your going to college have anything to do with expanding choices or reducing scarcity? Explain.

3. What is the difference between a positive question and a normative question?

4. You normally stay at home on Wednesday nights and study. Next Wednesday night, your best friend is having his big 21st birthday party. What is the opportunity cost of going to the party?

5. What is the incentive to spend four years of one’s life and tens of thousands of dollars to earn a college degree?

6. Why do markets typically lead to an efficient outcome for buyers and sellers?

7. In contrasting equity and efficiency, why do high-tech firms seem to treat their employees better (better wages, benefits, working environments, vacations, etc.) compared to how landscaping or fast-food franchises treat their employees? Is this fair? Is it efficient?

8. Stores depend on feedback from their customers as a way to improve their business practices and to market their products. To encourage customers to offer feedback, stores will sometimes offer an incentive, such as a discount on a future purchase or additional reward points in a frequent shopper program. Why do some customers, but not all, take advantage of the incentive to leave feedback? Does the actual shopping experience of the customer affect his or her willingness to do so?

9. The black rhinoceros is extremely endangered. Its horn is considered a powerful aphrodisiac in many Asian countries, and a single horn fetches many thousands of dollars on the black market, creating a great incentive for poachers. Unlike other stories of endangered species, this one might have a simple solution. Conservationists could capture as many rhinos as possible and remove their horns, reducing the incentive to poach. Do you think this will help reduce poaching? Why or why not?

10. Most amusement parks in the United States charge a fixed price for admission, which includes unlimited roller coaster rides for the day. Some people attempt to ride the roller coasters as often as possible in order to maximize the value of their admission. Why is riding a roller coaster at an amusement park over and over to “get your money’s worth” not considered thinking on the margin?

11. Because the U.S. government wants to reduce the nation’s reliance on fossil fuels, greater use of solar panels has been encouraged among households and businesses. However, the cost of installing solar panels can be prohibitively expensive for most people. Because people follow incentives, what can the government do to encourage more households and businesses to install solar panels?

12. Some colleges and universities charge tuition by the credit hour, while others charge tuition by the term, allowing students to take as many classes as they desire. How do these tuition structures affect the incentives students face when deciding how many classes to take? Provide an example of a beneficial effect and an example of a potentially harmful effect resulting from the incentives created with each system. How does marginal analysis affect the incentives with each system?

13. The New York Times reported on January 18, 2012, in an article titled “What the Top 1% of Earners Majored In,” that 8.2% of Americans who majored in economics for their undergraduate degree are in the top 1% of salary earners. Only those who majored in pre-med had a higher percentage in the top 1%. What might be some reasons why economics majors have done well in the job market?

14. According to the U.S. Department of Transportation, U.S. commercial airlines collected over $3.5 billion in baggage fees in 2014. Some airlines even charge passengers to bring carry-on bags onto the plane. How do baggage fees affect travelers’ behavior? What is a potential cost to the airline from this policy that might offset the benefit from the bag revenues?

15. Suppose your favorite band is on tour and coming to your area. Tickets are $100, and you take a day off from work for which you could have earned $60. What is your opportunity cost of going to the concert?

16. At your local family fun center, miniature golf is $12 per person for unlimited rounds in a day, while each go-kart session is $8. If you played 3 rounds of miniature golf and rode the go-karts 3 times, what was the marginal cost of the third round of miniature golf? What was the marginal cost of the third go-kart session?

17. According to By the Numbers, what is the average salary for a recent graduate who majored in economics? About how much does this average salary increase by one’s mid-career?

18. According to By the Numbers, about how many economics degrees were awarded to college graduates in 2014? How does this number compare to the number of nursing degrees? Communications degrees?