Which of the limitations listed below best explain why scarcity occurs? Select the correct answer below: our choices O our needs our resources O our creativity

When do we use Opportunity-Cost Approach?

7. What is scarcity? In market economies, what determines the distribution of scarce goods and resources?

A B C D E F Production Options Output of Output of Trucks per Day Tanks per Day 0 2.0 5 4 3 2 1 0 3.0 3.8 4.5 5.0 Output of Trucks (per day) 5 A A 0 0 1 B What is the opportunity cost of the first truck produced? Instructions: Enter your response rounded to one decimal place. tank(s). 2 3 4 E Output of Tanks (per day) F 5 6

2. Below is a production possibilities frontier (PPF) for Happyland, acountry that produces only two goods- wine and cheese. wine cheese a) Explain what the production possibilities frontier is and how it illustrates scarcity. b) What happens to the marginal opportunity costof cheese production in Happyland as the country increases its cheese production? (increase, decrease, unchanged or indeterminate?) Explain how you can tell this from the PPFand why it happens. c) Briefly describe two specific policies the government of Happyland could undertake to shift out their PPF in future periods. (By specific policies, I mean something they can actually do to change productivity for either or both of these goods. "Increase resources," for example, is not a specific policy. What resources and what type of policy could increase the resources used for either of these products?)

Which of the following is(are) good example(s) for explaining the economic concept of scarcity? (We talked about them in the lectures.) ''For a 1000-mile trip to Florida should I drive or should I take the bus'' example The day care center example where parents pay a small fee when they are late to pick up their kids The open buffet brunch example The model of the production possibilities frontier 'Heather how much compost to use for the tomatoes'' example