1. What do economists mean by scarcity? Can you think of anything that is not sc

Question

1. What do economists mean by scarcity? Can you think of anything that is not scarce according to the economic definition of scarcity?

2. What is a production possibilities frontier? How can we show efficiency on a production possibilities frontier? How can we show inefficiency? What causes a production possibilities frontier to shift outward?

3. What does increasing marginal opportunity cost mean? What are the implications of this idea for the shape of the production possibilities frontier?

4. What is absolute advantage? What is comparative advantage? Is it possible for a country to have a comparative advantage in producing a good without also having an absolute advantage? Explain.

5. What is the basis for trade: Absolute advantage or comparative advantage? How can an individual or country gain from specialization and trade?

6. What is a free market? In what ways does a free market differ from a centrally planned economy?

7. What is an entrepreneur? Why do entrepreneurs play a key role in a market system?

8. What are private property rights? What role do they play in the working of a market system? Why are independent courts important for a well-functioning economy?

Explanation / Answer

Ans 1.

Scarcity is one of the three fundamental questions that economics tries to address. Scarcity refers to
the limitations of resources or goods ie it refers to the limited availability of goods.Human beings have
unlimited wants and limited availability of resources.It also implies that not all wants of the societies can be addressed at the same time, there have to be some tradeoffs.
Yes,sunlight can be one of the things that are not scarce in the economic sense.

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.