1. Nobel prize-winning economist Milton Friedman summarized the idea of opportunity cost with his now famous remark: “There is no such thing as a free lunch.” What was Friedman really saying when he made this comment? Provide two real-life examples (one professional and one personal) in which you had to make a choice involving opportunity costs. Explain how opportunity costs influenced your decision making.
2. Is an understanding of microeconomics an important part of your employer’s decision-making process? If so, what role does economics play in your employer’s decisions? If not, elaborate on the noneconomic criteria your employer uses to make business and/or organizational decisions? Provide at least two real-life examples in which economics impacts your employer’s decision-making process.
3. All U.S. states subsidize education for college students, mostly by charging below-cost tuition. Nearly free tuition is available in many European countries and Canada. Do you think the government should subsidize college education so that it can be provided with very low tuition? Or, should college education be allocated in a market system, in which prices are set by supply and demand? Provide your rationale.
4. Give two examples of actions taken by a company, government, or organization whose effect is to prevent specific markets from reaching equilibrium. What evidence of excess supply or excess demand can you cite in these examples?