1} Suppose that the wages for those with only a high school diploma have decreas

Question

1} Suppose that the wages for those with only a high school diploma have decreased significantly. Using the concept of opportunity cost how would this effect the cost of attending University full time and obtaining a Bachelors Degree? Assume that the choice here is to attend school full time or to work with only a high school degree full time.

2) All economies must answer the question of how goods and services are distributed - which set of people consume which set of goods and services. How does a market economy ration goods and services? How else might an economy ration goods and services? In your answer discuss why rationing is necessary. Do you have any concerns with allowing the market to ration goods and services.

Explanation / Answer

Question 1) the opportunity cost of attending the full time bachelor's degree has been reduced, bccoz the next best option when no enrollment for B.A. , is to work with only high school degree.

& The wages with high school degree ,is reduced.

Thus cost of attending full time course has reduced

Answer 2) Market economy ration the goods & services based on the price mechanism.

With scarce resources, demand exceeds supply and prices rise. Thus demand gets discouraged to conserve resources. The greater the scarcity, the higher the price and the more the resource is rationed.

The other method is through quantity restriction, fix the quantity

The rationing is necessary to prevent the misuse of the resources & to allocate it effectively & efficiently

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