ECON MICRO
5th Edition
ISBN: 9781337000536
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 1, Problem 1.1P
To determine
The importance of the concept of scarcity in economics and to determine if a resource is scarce.
Concept introduction:
Scarcity of resources means lack of resources in comparison to wants.
Expert Solution & Answer
Explanation of Solution
The scarcity of resources is determined when
The concept is important to the definition of economics because it studies the human behavior as a relationship between unlimited wants and scarce resources. It is the science which studies how to make a choice between alternative uses of scarce resources. Scarcity is itself a big economic problem. Without it, economies studies will have no value.
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Students have asked these similar questions
16. Which of the following statements about the use of resources is not one of the key questions in economics?
a.
How are resources used?
b.
Location where resources are used?
c.
For whom are resources used?
d.
For what are resources used?
(Limitations of Rationality) Describe two limitations that make rational economic decisions more challenging.
6. The interaction of individual choices
Consider the following scenario:
People in Iowa eat both corn and potatoes. It is technically possible for farmers to grow both corn and potatoes in
Iowa, yet almost no farmers grow potatoes. Instead, every year, Iowa exports corn and imports potatoes from
Idaho, where farmers specialize in potatoes.
Which of the following principles of economic interaction best describes this scenario?
All costs are opportunity costs.
There is a tradeoff between equity and efficiency.
There are gains from trade.
When markets do not achieve efficiency, government intervention can improve overall welfare.
True/False: Evaluate the following statement:
Aa Aa
"People tend to exploit gains from trade, which usually lead to efficient market outcomes."
False
True
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