Respond to the following questions using economic analysis. In addition to the economic response, each question has either a political or social dilemma that increases the difficulty of the question. Your response should balance the dilemmas posed: 1. The economist’s greatest passion is not to change the world but understand it. Yet every heart conceals a desire to improve its surroundings. Do we need more illiterates? 3 Week 2. Why does popcorn cost more at the movies? Why is the obvious answer of monopoly wrong? (Be careful the first answer on the Internet is incorrect). 3. The Indifference Principle: Would you rather live in San Francisco with extraordinary shopping, world-class museums and a temperate climate or in Lincoln, Nebraska with a great housing market and clean air? Both cities are highly ranked in journals that report on the best cities in which to live. 4. Thank goodness for smoking because it helps keep insurance rates low. There are individuals who are cautious with their health. They exercise regularly and drink moderately. However, there are others who are more reckless. They are overweight, keep late hours and ride motorcycles. How do insurance companies set rates to account for both the cautious and the reckless?
