Questions:
1. What is the difference between scarcity and rarity?
2. Do Bill Gates and Donald Trump face scarcity and if yes, how so?
3. Specifically, what are your opportunity costs of going to college?
4. If all the unemployment in the economy were eliminated, how would this be shown on a production possibilities curve diagram?
5. What would cause the nation's production possibilities curve to shift inward and outward--be sure to give examples.
1. What are a couple of examples from your own life where you experienced a change or shift demand and what caused these two changes?
2. Specifically, what factors can decrease or shift demand to the left?
3. Specifically, what factors can increase or shift supply to the right?
4. How are the factors that change supply related to a producer's profits?
5. How is an abundance of something related to scarcity?
1. What are transaction costs and give an example of such a cost?
2. How do price ceilings affect the allocation of productive resources?
3. Legislative bodies impose price controls to help a part of the economy; who benefits and who is harmed by price ceilings and price floors?
4. How are price controls and illegal pricing in black markets related? Do consumers benefit from a black market?
5. Many contend that the minimum wage law in the U.S. contributes to unemployment. How can this be?
Why does economics emphaze making decisions at the margin rather than in total values?
2. Many people today are overweight; how does this fit in with dimishing marginal utility or does food have a constant or increasing marginal utility?
3. Assume Mary is currently paying $3 for each unit of good X which yields her 12 units of marginal utility. She is also consuming Y at a price of $4 per unit and gets 20 units of marginal utility. Is she behaving optimally or not and why?
4. What are the income and substitution effects of relative price changes? (You may want to refer to Appendix F.)
5. How does consumer demand relate to diminishing marginal utility?