1.What is the economist’s solution to the problem of smog in cities? a. Ban the use of cars in cities. b. Require commuters to use bicycles at least twice a week. c. Tax the owners of vehicles that...

1.What is the economist’s solution to the problem of smog in cities?

a. Ban the use of cars in cities.

b. Require commuters to use bicycles at least twice a week.

c. Tax the owners of vehicles that produce significant amounts of air pollution.

d. No economist would suggest any of the above.

2. Some recent work by economists on the sources of growth suggests that institutions such as the _________ and the _________ play key roles in economic growth.

3. (a)A road map incorporates two unrealistic assumptions: (1) _________ and (2) _________.

(b)The four elements of the economic way of thinking are (1) use _________ to simplify the analysis, (2) explore the relationship between two variables by _________, (3) think at the _________, and (4) rational people respond to _________.