Microeconomics
The Economic Problem
1. Why is economics relevant? (5–points)
2. Identify and explain the three fundamental questions in economics. (5–points)
3. What is the difference between factor of production and factor price? Give an example of each. (5–points)
4. Choice implies opportunity cost. Explain (5–points)
5. Scarcity implies choice. Explain (5–points)
6. Tigris produces only two products: tennis balls and tennis racquets. Each worker comes with a fixed quantity of materials and capital. The economy’s total labour force is fixed at 100 workers.
The following table indicates the amount of balls and racquets that can be produced daily with variousquantities of labour: (25–points)