Explain why both low living standard and high living standard country face the problem of scarcity.

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Answer 1

Question

Chapter 1, Problem 1SQP

To determine

Explain why both low living standard and high living standard country face the problem of scarcity.

Expert Solution & Answer

Explanation of Solution

Scarcity is a situation in which human wants are greater than the available resources. A low standard of living country is less wealthy, which means low production, low employment, and so on. A poor country like this would face the problem of lack of food, clothing, and shelter. Here, the resources are limited to meet the needs of people. In the case of a high standard of living country or rich countries, they are wealthy and where the production of goods and services are at the peak level. People in the rich country are highly competitive, so their needs are also more. Here the needs are more than that of available resources. Thus, $1 million does not contribute to solve the problem of scarcity or does not help the countries to escape from the problem of scarcity.

Economics Concept Introduction

Scarcity: Scarcity refers to the limited availability of resources than the required level.

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Short Description Fiscal Policy Graph Details Shown is a Fiscal Policy diagram with the variable Real GDP (billions of dollars) on the x-axis and the variable Price Level on the y-axis. The x-axis is scaled from 0 to 800 billion dollars with an increment of 40 billion dollars, and the y-axis is scaled from 30 to 150 units with an increment of 5 units. Object Details On the graph we have:Four Line Objects:An upward sloping Aggregate Supply, AS line with two endpoints:Point 1 at (160, 70)Point 2 at (720, 140)A downward sloping Aggregate Demand, AD1 line with two endpoints:Point 1 at (80, 110)Point 2 at (640, 40)A vertical Long-run Aggregate Supply, LRAS with two endpoints:Point 1 at (400, 145)Point 2 at (400, 30)A downward sloping Aggregate Demand, AD line with two endpoints:Point 1 at (720, 60)Point 2 at (160, 130)Two Reference Points:Lines AS, AD, and LRAS intersect at (400, 100)Lines AS and AD1 intersect at (280, 85) a. How much does aggregate demand need to change to restore the…

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a. How much does aggregate demand need to change to restore the economy to its long-run equilibrium? $ billion b. If the MPC is 0.6, how much does government purchases need to change to shift aggregate demand by the amount you found in part a? $ billion Suppose instead that the MPC is 0.95. c. How much does aggregate demand and government purchases need to change to restore the economy to its long-run equilibrium? Aggregate demand needs to change by $ billion and government purchases need to change by $ billion.

Answer 2

Question

Chapter 1, Problem 1SQP

To determine

Explain why both low living standard and high living standard country face the problem of scarcity.

Expert Solution & Answer

Explanation of Solution

Scarcity is a situation in which human wants are greater than the available resources. A low standard of living country is less wealthy, which means low production, low employment, and so on. A poor country like this would face the problem of lack of food, clothing, and shelter. Here, the resources are limited to meet the needs of people. In the case of a high standard of living country or rich countries, they are wealthy and where the production of goods and services are at the peak level. People in the rich country are highly competitive, so their needs are also more. Here the needs are more than that of available resources. Thus, $1 million does not contribute to solve the problem of scarcity or does not help the countries to escape from the problem of scarcity.

Economics Concept Introduction

Scarcity: Scarcity refers to the limited availability of resources than the required level.

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Answer 3

Question

Chapter 1, Problem 1SQP

To determine

Explain why both low living standard and high living standard country face the problem of scarcity.

Expert Solution & Answer

Explanation of Solution

Scarcity is a situation in which human wants are greater than the available resources. A low standard of living country is less wealthy, which means low production, low employment, and so on. A poor country like this would face the problem of lack of food, clothing, and shelter. Here, the resources are limited to meet the needs of people. In the case of a high standard of living country or rich countries, they are wealthy and where the production of goods and services are at the peak level. People in the rich country are highly competitive, so their needs are also more. Here the needs are more than that of available resources. Thus, $1 million does not contribute to solve the problem of scarcity or does not help the countries to escape from the problem of scarcity.

Economics Concept Introduction

Scarcity: Scarcity refers to the limited availability of resources than the required level.

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Answer 4

Question

Chapter 1, Problem 1SQP

To determine

Explain why both low living standard and high living standard country face the problem of scarcity.

Expert Solution & Answer

Explanation of Solution

Scarcity is a situation in which human wants are greater than the available resources. A low standard of living country is less wealthy, which means low production, low employment, and so on. A poor country like this would face the problem of lack of food, clothing, and shelter. Here, the resources are limited to meet the needs of people. In the case of a high standard of living country or rich countries, they are wealthy and where the production of goods and services are at the peak level. People in the rich country are highly competitive, so their needs are also more. Here the needs are more than that of available resources. Thus, $1 million does not contribute to solve the problem of scarcity or does not help the countries to escape from the problem of scarcity.

Economics Concept Introduction

Scarcity: Scarcity refers to the limited availability of resources than the required level.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 1, Problem 1SQP

To determine

Explain why both low living standard and high living standard country face the problem of scarcity.

Expert Solution & Answer

Explanation of Solution

Scarcity is a situation in which human wants are greater than the available resources. A low standard of living country is less wealthy, which means low production, low employment, and so on. A poor country like this would face the problem of lack of food, clothing, and shelter. Here, the resources are limited to meet the needs of people. In the case of a high standard of living country or rich countries, they are wealthy and where the production of goods and services are at the peak level. People in the rich country are highly competitive, so their needs are also more. Here the needs are more than that of available resources. Thus, $1 million does not contribute to solve the problem of scarcity or does not help the countries to escape from the problem of scarcity.

Economics Concept Introduction

Scarcity: Scarcity refers to the limited availability of resources than the required level.

Answer 6

Chapter 1, Problem 1SQP

To determine

Explain why both low living standard and high living standard country face the problem of scarcity.

Expert Solution & Answer

Explanation of Solution

Scarcity is a situation in which human wants are greater than the available resources. A low standard of living country is less wealthy, which means low production, low employment, and so on. A poor country like this would face the problem of lack of food, clothing, and shelter. Here, the resources are limited to meet the needs of people. In the case of a high standard of living country or rich countries, they are wealthy and where the production of goods and services are at the peak level. People in the rich country are highly competitive, so their needs are also more. Here the needs are more than that of available resources. Thus, $1 million does not contribute to solve the problem of scarcity or does not help the countries to escape from the problem of scarcity.

Economics Concept Introduction

Scarcity: Scarcity refers to the limited availability of resources than the required level.

Answer 7

Chapter 1, Problem 1SQP

To determine

Explain why both low living standard and high living standard country face the problem of scarcity.

Answer 8

Expert Solution & Answer

Explanation of Solution

Scarcity is a situation in which human wants are greater than the available resources. A low standard of living country is less wealthy, which means low production, low employment, and so on. A poor country like this would face the problem of lack of food, clothing, and shelter. Here, the resources are limited to meet the needs of people. In the case of a high standard of living country or rich countries, they are wealthy and where the production of goods and services are at the peak level. People in the rich country are highly competitive, so their needs are also more. Here the needs are more than that of available resources. Thus, $1 million does not contribute to solve the problem of scarcity or does not help the countries to escape from the problem of scarcity.