Economics: Principles & Policy
14th Edition
ISBN: 9781337696326
Author: William J. Baumol; Alan S. Blinder; John L. Solow
Publisher: Cengage Learning
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Chapter 3, Problem 5DQ
To determine
The
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The United States is one of the world's wealthiest countries. Think of a recent case in which the decisions of the U.S. government were severely constrained by scarcity. Describe the trade-offs that were involved. What were the opportunity costs of the decisions that were actually made?
describe an important trade-off that you recently faced and give an example of some action that has either monetary or non monetary opportunity cost
“Scarcity is the fundamental problem that every nation in this world faces.” What do you mean by this statement? If you were an economist how would you address this fundamental problem?
Chapter 3 Solutions
Economics: Principles & Policy
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- Economics affects nearly everything we do in some way. Someone else has produced most items we consume, or use, in our daily lives, from food to clothes to music to gas for our cars. Chances are, when we purchase these daily items, we don't question the price with the producer. But in the United States, the interactions between the consumers and producers determine quite a lot in terms of business and economics. Think about the items and services that you and your family buy or consume. What causes you to pay the prices that you do for these goods and services? What determines the price that's on the price tag? What goes into determining, or setting, that price? Consider all the possible elements that could influence the prices you pay.arrow_forwardYou win $100 in a basketball pool. You have a choice between spending the money now or putting it away for a year in a bank account that pays 5 percent interest. What is the opportunity cost of spending the $100 now?arrow_forwardSuppose your friend ask you to go watching a movie while you are studying for an examination. what would be the opportunity cost of watching the movie? Explain your answer.arrow_forward
- true or false Economic models must mirror reality or they are of no value. When economists make normative statements, they are more likely to be acting as scientists. If a country's worker can produce 5 hamburgers per hour and 10 bags of fries per hour, then absent trade with other countries,the price for 1 bag of fries is 2 hamburgers. If trade benefits one country, it's trading partner must be worse off due to the price of trade. If an advanced country has an absolute advantage in the production of everything(relative to certain less developed countries), the advanced country will benefit if it eliminates trade with less developed countries and becomes self sufficient.arrow_forwardThree economic questions must be determined in all societies. What are they? What goods will be produced? How will goods be produced? For whom will goods be produced? What is the opportunity cost of production? Does the society have a comparative advantage in production? Will consumers desire the goods being produced? What will the price of each good be? Who will produce each good? Who will consume each good? How much will be produced? When will it be produced? How much will it cost?arrow_forwardWhat does the Powerbar model tell us about how creativity fits into a market economy?arrow_forward
- Can you give an specific example that includes two economic terms?arrow_forwardOpportunity cost is whatever you give up to get something. What is the opportunity cost of staying up all night to study for your economics final exam? What would you be giving up to stay up all night to study for your exam?arrow_forwardExamine the different economic systems in a country, using examples.arrow_forward
- T or F Everything we do has its opportunity cost. Why?arrow_forwardSuppose there are only two people in the world. Each person’s production possibilities frontier also represents his or her consumption possibilities when neither person faces trade-offs. the frontiers are straight lines. the frontiers are bowed out. they choose not to trade with one another.arrow_forwardIdentify each of the following quotes as being associated with either the concept of the invisible hand or the concept of creative destruction. "Each day, central planners in the old Soviet Union were tasked with setting 27 million prices-correctly."arrow_forward
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