Problem Set 1 ECON 101 You may work on the problem set individually or with up to 3 of your classmates. If you choose to work with a group, you all need to be attempting the problems and discussing them together or you will miss out on learning the concepts, which is the entire point of doing these problem sets. Each student needs to submit their own work on Gradescope. To submit, find the email you were sent with log-in instructions, go to www.Gradescope.com, and create an account/log-in. 1. Classify each of the following statements as positive or normative. a) “Instead of raising taxes, Mr. Abe and the government need to press forward with structural reforms and changes to longstanding practices that have stifled the economy” – NY Times 9/10/14 Normative b) “The bottom half of the population, on the other hand, shares a total of six per cent of the wealth” – CBC News 9/11/14 Positive c) “It’s important to understand the persistence and power of the inflation cult” – NY Times 9/11/14 Normative d) “The loonie fell 0.93 of a cent to 90.52 cents US, its lowest close since March 31”The Canadian Press 9/11/14 Positive 2. Your car needs gas before you can go to work this morning. You decide to go to the gas station that is out of the way, but where gas is $0.10/gallon cheaper than the gas station on the way to work. This gets you into work 6 minutes later than going to the other gas station. If your wage is $20/hour and you have to purchase 15 gallons of gas, was this worth it? Why or why not? The cheaper gas is not worth it. Going to the gas station with the cheaper gas will save you $1.50, but you lose out of the opportunity of working. Assuming that your wage is prorated within the hour, you could’ve earned $2 for 6 minutes of work. Because you earn more working for 6 minutes then the gas money you save, the trip was not worth it.