“The two cornerstones of economics are the scarcity of resources and the multiplicity of wants. True economy consists of deriving maximum want satisfaction from available resources.” Explain
Please provide the best answer for the statement.
The first statement refers to the basic economic problem: that society’s wants are unlimited relative to the limited supply of productive resources. The second part refers to the concept of efficiency, both allocation and productive. Since resources are scarce, it is desirable to achieve the most output from those available. Otherwise we waste resources and will not satisfy as many wants as we could from the resources that we have available, which would mean not achieving productive efficiency. Allocation efficiency means the maximum satisfaction of wants with these resources.
You might also like to view...
As the real interest rate rises, the quantity of loanable funds supplied ________ and the quantity of loanable funds demanded ________
A) does not change; does not change B) decreases; decreases C) increases; decreases D) increases; increases E) decreases; increases
Today, unions play a larger role in Europe than they do in the U.S
a. True b. False Indicate whether the statement is true or false
Structural unemployment is increased when the wage is kept above the market-clearing wage by:
A. worker mobility. B. skill-biased technological change. C. labor unions. D. unemployment insurance.
Refer to the graph shown. If market price decreases from $7.00 per unit to $6.00 per unit, a profit-maximizing perfectly competitive firm will:
A. decrease output from 850 to 750. B. produce 850 units of output. C. increase output from 650 to 750. D. continue to produce 850 units.