"A shortage is the same thing as scarcity." Do you agree or disagree with this statement? Why? What can cause a shortage to disappear in a market? What can cause scarcity to disappear?
What will be an ideal response?
Disagree with the statement. Scarcity is the situation where the resources available to produce goods and services are insufficient to satisfy all human wants. Scarcity is a condition of the world. A shortage occurs when the price is below the equilibrium price and quantity demanded at that price is greater than quantity supplied. The shortage can disappear by letting price rise to its equilibrium level. Scarcity will never disappear.
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In an economy, 40 million people are employed, 2 million are unemployed, and 8 million are not in the labor force. What is the labor force participation rate?
A) 83 percent B) 84 percent C) 80 percent D) 87.5 percent
Union membership is likely to fall as growth in tertiary employment occurs in the private sector
Indicate whether the statement is true or false
Which of the following observations was made famous by Adam Smith in his book The Wealth of Nations?
a. There is no such thing as a free lunch. b. People buy more when prices are low than when prices are high. c. No matter how much people earn, they tend to spend more than they earn. d. Households and firms interacting in markets are guided by an "invisible hand" that leads them to desirable market outcomes.
Suppose a decrease in the supply of paper results in an increase in revenue. This indicates that
A) the demand for paper is inelastic. B) the demand for paper is elastic. C) the supply of paper is inelastic. D) the supply of paper is elastic.