Distinguish between scarcity and shortages
What will be an ideal response?
Scarcity exists because the wants of human beings are unlimited while resources are limited. The meaning of a shortage is not the same as scarcity. A shortage exists when people have to wait in line for things, especially on a temporary basis. Scarcity relates to the poor but also to the rich; scarcity is a fact of life that affects everyone. A shortage occurs when the quantity of a good desired exceeds the quantity available at a positive price.
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Which of the following describes that people cannot examine every possible choice available to them but instead use simple rules of thumb to sort among the alternatives that happen to occur to them?
A) self-interest B) bounded rationality C) ceteris paribus D) normative economics
The labor market is an example of a
a. government market b. classified market c. communication market d. resource market e. product market
Suppose that the world price of kiwi fruit ($10 per box) is below the domestic price ($12 per box). A tariff of $1 per box would:
a. cause foreign producers to be better off, because the price they charge is now higher by $1 per box. b. cause domestic producers to be worse off by $5 per box. c. make domestic consumers worse off as they would be paying $1 more than the domestic price. d. make domestic consumers pay $1 more than the free trade price, but still $1 less than the domestic price. e. cause domestic producers to be worse off by $10 per box.
Interest rates and the price of old or existing bonds are
A) directly related. B) independent of each other. C) inversely related. D) sometimes directly related and sometimes inversely related. E) There is not enough information to answer the question.