Carefully define the following terms and explain their importance to the study of economics.
a. Resources
b. Rational decision
c. Scarcity
d. Opportunity cost
What will be an ideal response?
a. Resources are the instruments provided by nature or by people that are used to create goods and services that humans want. They are scarce and include raw materials, labor, and capital.b. A rational decision is one that best serves the objective of the decision maker. The use of the word rational does not indicate approval or disapproval of the objective.c. Scarcity is the general fact that humanity has less of resources and things than we would like. Scarcity leads to the need for rational decisions regarding economic resources.d. The opportunity cost of any decision is the forgone value of the next best alternative that is not chosen. Scarcity imposes the need to compute opportunity cost.
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Consider the following economic agents:
a. the government b. consumers c. producers Who, in a modern mixed economy, decides what goods and services will be produced with the scarce resources available in that economy? A) consumers B) consumers and producers C) producers D) the government E) the government, consumers, and producers
Given the equations for C, I, G, and NX below, what is the marginal propensity to save?
C = 1,000 + 0.8Y I = 1,500 G =1,250 NX = 100 A) 0.2 B) 0.8 C) 1.8 D) 10
Federal land policy of the United States was much less generous toward squatters than some of the colonial government's land policies before Independence
Indicate whether the statement is true or false
Appendix: Each partner in a simple profit-sharing contract that splits the independently verifiable sales revenue minus unobservable cost has an incentive
a. to reject an automatic renewal of the contract b. to understate fixed cost c. to overstate avoidable cost d. to understate customer loyalty for repeat purchases e. to renew the partnership contract