Assignment Problems Essay

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Assignment 1 Assignment 1 is due after you complete Lessons 1 to 4. It is worth 20% of your final grade. Prepare your responses to these assignment problems in a word processing file; put financial data in a spreadsheet file. As you complete the assignment problems for each lesson, add your responses to these files. Do not submit your answers for grading until you have completed all parts of Assignment 1. Note: In assignments, show all calculations to 4 decimal places. Lesson 1: Assignment Problems 1.1 Households make four kinds of economic decisions (textbook, pp. 4–5). Suppose you have two households with the same income. Household A has one income earner and Household B has two income earners. How would the four types of economic decisions differ between these two otherwise identical households? (8 marks) 1.2 Three friends have just graduated, each with a B.Mgt. degree. One wants to start a restaurant and another wants to work as a subcontractor in a building trade. The third friend wants to put together a firm with a couple of other graduates to provide several kinds of complementary financial services including insurance, financial planning, and bookkeeping. What form of business organization (textbook, pp. 8–9) would you suggest each of the three friends should use, and why? (12 marks) Do not submit these questions for grading until you have completed all parts of Assignment 1, due after Lesson 4. Lesson 2: Assignment Problems 2.1 Adam Smith is often called the father of economics. His famous book, The Wealth of Nations, talks about an “invisible hand” which automatically allocates goods to the persons most able to put them to good use. The invisible hand operates through the price mechanism for goods and services, so that individuals who trade on the market, while seeking only their own good, are actually efficiently

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