I was wondering if you would be able to help me with this questions please. 1) W

Question

I was wondering if you would be able to help me with this questions please.
1) Which of the core principles (1) Scarcity, choice and opportunity cost, 2) cost-benefit analysis, 3) incentive principle, 4) diminishing returns) is expressed in the following statements? Support your choice.
(i) Kamisha is planning her activities for a hot summer day. She would like to go both to the swimming pool and to see the latest blockbuster movie, but because she can only get tickets to the movie for the same time that the pool is open she can only choose one activity.

Which of the core principles (1) Scarcity, choice and opportunity cost, 2) cost-benefit analysis, 3) incentive principle, 4) diminishing returns) is expressed in the following statements? Support your choice.
(ii) Most governments have a policy of not negotiating with kidnappers but relatives of kidnap victims do not have the same policy.
Question 2 Part iii
Which of the core principles (1) Scarcity, choice and opportunity cost, 2) cost-benefit analysis, 3) incentive principle, 4) diminishing returns) is expressed in the following statements? Support your choice.
(iii) From the dozen seeds you planted in a small flowerbed in front of your house, ten of them germinated and grew into plants. Liking how they look you planted another dozen seeds in the same bed. This time only seven of the seeds grew into plants.

Explanation / Answer

1.
i
It is the principle of scarcity, choice and opportunity cost. Here, Kamisha has to evaluate the opportunity cost of each activity and make her choice. Here, time and money to spend is fixed or scarce, so she has to make the right choice that will give highest benefits to her and forego the second best alternative.

ii
It is the principle of incentive that works. Government does not talk to the kidnappers, because the government is not too much worried about the individuals, rather they show examples by sticking to the policy. So, government lacks incentives to talk. But, relatives of the kidnapped person, want to negotiate, as they want their people back at home safely. Hence, relatives have incentive to talk and negotiate a deal. It is the case of incentive principle.

2.
iii
It is the principle of diminishing returns. As per this principle, marginal return, decreases with an increase in the level of production. In the given scenario, the first round of planting seeds, 10 seeds germinated, but in the second round, only seven seeds germinated and grew into the plant. So, first 12 seeds produced 10 plants, but second 12 seeds produced only 7 plants. Here, the diminishing return principle is setting in the given case.

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