1. What is meant by opportunity cost? Give an example. Suppose that you need to take a class at 3PM, but you can also work an extra shift at your job. What is the opportunity cost of taking the 3PM class? Provide an alternative scenario that describes the concept of opportunity cost.

2. Describe what is meant by incentives. How do people typically respond to incentives? Provide a realistic example. Suppose you see a job advertisement in a local newspaper offering employment to individuals who want to humanely capture rabid raccoons in Central Park. The offer states that hourly compensation is $95.77. Why would this job offer such a high wage? How is this scenario related to our topic of incentives? Provide a detailed explanation.

3. Many parts of the economy are related to one another. In particular, a decrease in spending in one area may have an impact somewhere else. Provide an example of this scenario. Economic theory tells us that "one person's spending is another person's income." What is meant by this phrase?

4. Describe what is meant by a normal good. Provide a real-life example. What is an inferior good? How does a change in income impact the demand for inferior goods? What is meant by the law of demand? Provide a relevant example.

5. Suppose that two goods are substitutes. If the price of one of the goods rises, what happens to the demand for the other good? Explain why this is the case. If two goods are complementary and the price of one of the goods falls, what happens to the demand for the other good? Explain why. Provide examples to justify your response