Economics: Principles & Policy
14th Edition
ISBN: 9781337696326
Author: William J. Baumol; Alan S. Blinder; John L. Solow
Publisher: Cengage Learning
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Question
Chapter 3, Problem 1DQ
To determine
Explain how resources limitation is affected in different cases.
Expert Solution & Answer
Explanation of Solution
- (a) The poorest person on Earth: The resources limitation to the poorest person on the Earth is a dangerous situation. The
opportunity cost of any extra goods or services is life threatening. - (b) The richest person in the United States: The richest person also faces problem of resources limitation. For example, he can buy a ship because he is rich, but he will lack the resources to buy an oil company. Thus, resources scarcity not only affects the poorest person but also affects the richest person.
- (d) A farmer in Kansas: If the farmers face scarcity in resources, it is hard for them to take decisions regarding production. However, the important factor is that they cannot change the decision regarding farming immediately.
- (e) The government of Indonesia: If the government faces resources limitation, it affects the entire nation. The government has an authority to command and allocate the amount of labor resources and other productive resources in the nation.
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