Economics Week 1 Essay

830 Words Oct 22nd, 2013 4 Pages
Week 1 Assignment - Critical Analysis Questions – Chapters 1 & 2
Matthew Philip Wee
Grantham University

Chapter 1

3a. What method is used to ration goods in a market economy? How does this rationing method influence the incentive of individuals to supply goods, services, and resources to others?
3a. The method that is used to ration goods in a market economy is the price mechanism. This rationing method influences the incentive of individuals to supply goods, services, and resources to others by ensuring that they obtain money to buy other goods, services and resources. If an individual can receive more money for a good or service than they will have more incentive to sell that item.
3b. How are grades
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Shawn can use marginal analysis to make his decision on whether to go back for a fourth plate. He will need to understand his body to ensure that he has enough room in his stomach for a fourth plate. Eating a lot of food will also ensure that he will get his money’s worth.

Chapter 2

6. If you have a private-ownership right to something, what does this mean? Does private ownership give you the right to do anything you want with the things that you own? Explain. How does private ownership influence the incentive of individuals to (a) take care of things, (b) conserve resources for the future, and (c) develop and modify things in ways that are beneficial to others? Explain. 6. Private-ownership rights to something means that you own that property. Private ownership gives you the right to do anything you want with the things that you own. The reason for this is because you bought and own that product. Private-ownership provides people with a strong incentive to take care of things and develop resources in ways that are highly valued by others. If you own something you will do whatever it takes to ensure it works properly and you will do whatever it takes to develop it to ensure it works properly.
7. What is the law of comparative advantage? According to the law of comparative advantage, what should be the distinguishing characteristics of the goods a nation produces? What should be the distinguishing characteristics of the goods a nation

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