Write 8-10 sentences about each question. Everything you may need is already attached.

1.) Discuss each of the economic ideas: People are rational, people respond to incentives, and optimal decisions are made at the margin. Please give an example of each.
2.) What is scarcity? Why is scarcity central to the study of economics? Please give a real world example of scarcity.

3.) What is a positive economic statement? What is a normative economic statement? Provide an example of each.

4.) Explain how consumer surplus is derived from the difference between the willingness to pay and the market equilibrium price. Please use examples to support your posting.

https://util.wwnorton.com/jwplayer?type=video&msrc…

https://wwnorton.com/college/econ/principles-of-ec…

https://util.wwnorton.com/jwplayer?type=video&msrc…

Solution Preview

1. Economic ideas
This is the study of how limited resources are allocated to satisfy unlimited needs. These are merely the choices made by consumers, managers, and the government to attain the set goals under the scarce resources. Economists assume that people are rational because consumers utilize all the available information in making decisions to realize their set goals. Rational people weigh the benefits and the costs to incur in various choices and choose the best action in which benefits outweighs the costs.

(594 words)