Question: 1. How would each of the following events affect the supply of compact cars? The price of steel rises. The production technology for car manufacturing improves. The price of sport utility vehicles falls.
2. Explain what is meant by the paradox of thrift.
3. Your boss is impressed with your performance over the past year and has decided to give you a 5% increase in your salary. Are you unambiguously better off with your increased salary? What factors must be considered?
4. For each of the following transactions, explain why they would or would not be counted in the GDP of the United States. American auto producer Ford builds a factory in Alberta, Canada. You buy a blueberry muffin at your local coffee shop A Ford dealership in Ohio has 15 unsold new 2011 model cars at the end of 2011.