Explain why choice is a basic economic problem faced by every society.
What will be an ideal response?
Ans: The resources available to mankind are not unlimited. However human wants and needs are unlimited. Thus it become impossible to satisfy all the needs. Unless choices are made, people would not be able to make decisions and not satisfy any of the needs. Hence choosing among the unlimited needs becomes necessary. However these choices should be made keeping in mind the opportunity costs.
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A sudden fall in housing prices in Potentia has lowered the confidence of households. Assuming all else equal, this is likely to lead to a(n) ________
A) increase in the demand for construction workers B) fall in the unemployment rate C) increase in the overall price level D) decline in current consumption
What is a bond buyer promised when she buys a bond?
Distinguish the short run from the long run. Generally, what causes costs of production to vary with output in the short run? What generally causes costs of production to vary in the long run?
What will be an ideal response?
Assume that Spain will specialize in either cars or TVs. What is their opportunity cost of producing one car?
