In an answer of at least two well-developed paragraphs, compare the concepts of scarcity and shortage, and provide an example of each.
All of society competes for the limited resources that are available. In an answer of at least two well-developed paragraphs, describe four common methods countries use for allocating resources and explain how each addresses the issue of competition between members of society.
Answer both parts of this question for full credit.
Part 1: Economists are fond of saying “there is no such thing as a free lunch.” From an economist’s perspective, in at least two well-developed paragraphs, explain what this statement means. Be sure to explain how situations like this include choices and trade-offs, and include an example.
Part 2: From a consumer’s perspective, in at least one well-developed paragraph, describe how consumer rights can be overlooked.
The ABC Company executives decide that they will begin to produce more gidgets than gadgets. They previously had been producing 500,000 gadgets per year and only 300,000 gidgets. Yet they noticed that at the end of the year, there were still 100,000 gadgets left on the shelves and no gidgets.
a. In an answer of at least one paragraph, explain why the company would want to produce more gidgets based on this market data.
b. In an answer of at least one paragraph, explain why the ABC Company’s decision involves a trade-off and identify what the trade-off is.
You are faced with a dilemma. You want very much to go to the park with your friends and hang out. However, your mother left you firm instructions to clean your bedroom. Her final words were “or else!” Create a decision-making grid similar to the one you learned about in this unit. Then decide which would be the best use of your time. Make a choice as to which you will do. Submit both your grid and an explanation (at least one paragraph in length) in which you explain how you have decided to use your time and why you made that particular choice.
A new Japanese restaurant opens two blocks from your home. The owner, Reiko, is a personal friend of yours. You don’t particularly like Japanese food, but you decide to go anyway; however, there is nothing on the menu that sounds appealing. Unfortunately, it turns out that most of the people in your town don’t like Japanese cuisine either. Reiko confides that business is not good, but she isn’t sure what to do from an economic standpoint. Which of the following would most likely describe Adam Smith’s perspective on this problem?