ECON 101 Chapter Notes - Chapter 1: Planned Economy, Division Of Labour, Mixed Economy

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16 Oct 2014

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ECON 101 Full Course Notes

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It is the study of the use of scarce resources to satisfy unlimited human wants. People have unlimited desires, but resources are limited. Resources are called factors of production: they are used to produce things that people desire. What is produced is divided into goods and. Scarcity implies that choices must be made, and making choices implies the existence of costs. The value of what you give up to have the item. So the price of going to vacation isn"t just. if you had not gone on vacation. Accounting cost of the trip is , while the opportunity cost is . A curve that shows which alternative combinations of commodities can just be attained if all available resources are used efficiently. The boundary between attainable and unattainable output combinations. Indicated by the unattainable combinations outside the boundary. By the need to choose among the alternative attainable points along the boundary.

Related Questions

6. Given that resources are scarce:

A. A "free lunch" is possible, but only for a limited number of people.

B. Poor countries must make choices, but rich countries do not have to make choices.

C. Opportunity costs are experienced whenever choices are made.

D. Some choices involve opportunity costs while other choices do not

7. The opportunity cost of playing tennis with your friend is:

A. Negative since its good exercise

B. Zero since you already own the tennis racket and play on a public court

C. The next-best alternative use of your time that is forgone.

D. The cost of the tennis lessons you took last year.

8. The concept of opportunity cost would become irrelevant if:

A. The market mechanism functioned to allocate resources.

B. The government allocated resources.

C. The production possibilities curve bowed outward.

D. Resources were no longer scarce.

9. If resources are limited:

A. People will rush to buy more goods than they would otherwise.

B. Businesses will sell more products than they would otherwise.

C. Choices that involve tradeoffs must be made.

D. All individuals are deprived of basic necessities.

10. Which of the following is true about the factors of production?

A. The factors of production as well as technology determine the physical limits to production

B. Rich countries have an unlimited quantity of factors.

C. The factors include natural resources but not skilled labor.

D. Some factors are scarce but other factors are not.

amethystraven1

Please only anwer the Following question:

Question :focus in on one of the main concepts covered (e.g., scarcity, ceterus pariubus, association vs. causation, opportunity cost, marginal analysis, etc.), define it in your own words, and provide an example. Discuss why you think this is an important aspect in the study of economics.

Answer:

Scarcity is a situation where the availability of resources at our disposal is less then the needs of society.since human wants are unlimited and resources are limited therefore it gives rise to a problem of choice.

Example the oil resources are scarce in relation to Wants .

This is important in decision analysis of any economic problem as without it we are unable to judge which good to produce and sell in market.

Following question:

Can you comment on what you see as the relationship between scarcity, opportunity cost and trade off?

1. __________, a term referring to the fact that for many good, as the level of production increases, the average cost of producing each individual unit declines.
a. Economies of scale
b. Specialization
c. Division of labor
d. Skill
2. Which of the following best characterizes the circular flow of income?
a. Household buy factors of production from business, and business buy goods and services from household
b. Business buy resources from the government, and household buy goods and services from business.
c. Businesses buy resources from households, and household use their income from the sale of resources to buy goods and services from businesses
d. The government purchases resources from businesses and households and then sells goods and services to businesses and households.
3. Philosophers draw a distinction between positive statements, which describe the world as it is, and _____________ which describe how the world should be.
a. Opportunity cost
b. Trade-off
c. Normative statement
d. Budget constraint

4. Scarcity implies that:
a. It is impossible to completely fulfill the unlimited human desire for goods and services with the limited resources available
b. Consumers are too poor to afford the goods and services available
c. At the current market price, consumers are willing to purchase more of a good than suppliers are willing to produce.
d. Consumers would be willing to purchase the same quantity of a good at a higher price.
5. The opportunity cost of an action.
a. Can be determined by considering both the benefits that flow from as well as the monetary costs incurred as a result of the action.
b. Can be determined by adding up the bills incurring as a result of the action
c. Can be objectively determined only by economist
d. Is a subjective valuation that can be determined only by the individual who chooses the action.
6.

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ECON 101 Chapter Notes - Chapter 1: Planned Economy, Division Of Labour, Mixed Economy

ECON 101 Full Course Notes

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