Economics: Principles & Policy
14th Edition
ISBN: 9781337912679
Author: William J. Baumol; Alan S. Blinder; John L. Solow
Publisher: Cengage Learning US
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Question
Chapter 3, Problem 1DQ
To determine
Explain how resources limitation is affected in different cases.
Expert Solution & Answer
Explanation of Solution
- (a) The poorest person on Earth: The resources limitation to the poorest person on the Earth is a dangerous situation. The
opportunity cost of any extra goods or services is life threatening. - (b) The richest person in the United States: The richest person also faces problem of resources limitation. For example, he can buy a ship because he is rich, but he will lack the resources to buy an oil company. Thus, resources scarcity not only affects the poorest person but also affects the richest person.
- (d) A farmer in Kansas: If the farmers face scarcity in resources, it is hard for them to take decisions regarding production. However, the important factor is that they cannot change the decision regarding farming immediately.
- (e) The government of Indonesia: If the government faces resources limitation, it affects the entire nation. The government has an authority to command and allocate the amount of labor resources and other productive resources in the nation.
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Economics: Principles & Policy
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- A farmer decides to use land for farming instead of building a golf court what is the opportunity cost farming?arrow_forwardHow do market prices coordinate the economic activity of millions of individuals?arrow_forwardDiscuss the resource limitations that affect: The poorest person on earth Bill Gates, the richest person in U.S. A farmer in Haryana The Government of Indiaarrow_forward
- Which of the following is not a way to the us government intervenes in the economy a. Minimum wage b. Social security c. Unemployment insurance d. telling businesses how much quantity to make e. the affordable care act(aka Obama care) f. Not allowing companies to merge or buy another companyarrow_forwardAll people in any country can get resouces that will make their lives better or have to have to survive. These can be identified as A. wants and needs B. price and production C. opportunity costs and trade off D. capital and laborarrow_forwardQUESTION 1 Choose the most correct answer to the following questions/phrases. Only write down the question number and the letter of your answer. 1.1 economy. (1) 1.1.1 Communism and Socialism are both examples of a A Planned Market C Mixed Open 1.1.2 In a economy various aspects of production are determined by supply and demand. (1) Planned Market Mixed Оpen 1.1.3 An unfair and unethical phenomenon that does not occur in planned economies. (1) Social grants Over-development B. Monopolies Unemployment benefits 1.1.4 In a economy consumer demand is predictable and controllable. (1) A Planned B. Market Mixed Open 1.1.5 The flow of goods, services and knowledge over international borders. (1) Expansion B. Globalisation Free flow D. Customs [5]arrow_forward
- In which of the following economic system does the government owns the factors of production and distribution? a. Capitalist Economy b. Command Economy c. Mixed Economy d. Private Economyarrow_forwardThe forces that make market economies work are a.price and quantity. b.demand and supply. c.the Senate and House of Representatives. d.the Constitution and the Bill of Rights.arrow_forwardAdam Smith's invisible hand refers toa.the subtle and often hidden methods that businesses used to profit at consumers' expenseb.the ability of free markets to reach desireable outcomes,despite the self interest of market participants.c.the ability of government regulation to benefit consumers,even if the consumers are unaware of the regulations.d.the way in which producers or con sumers in unregulated markets impose cost on innocent bystanders.arrow_forward
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