What are the main functions of markets?
The main function of a market is to enable buyers and sellers to get
information and to do business with each other. Markets have evolved because
they facilitate trade, that is, they facilitate the ability of buyers
Does economic growth overcome scarcity?
Scarcity reflects the inability to satisfy all our wants. Regardless of the
amount of economic growth, scarcity will remain present because it will
never be possible to satisfy all our wants. For instance it will ne
What are the gains from specialization and trade?
From societys standpoint, the total output of goods and services available for
consumption is greater with specialization and trade. From an individuals
perspective, each person who specializes enjoys bein
What is Harrys marginal cost of tennis if he plays for 3 hours a week; ( 5 hours a
week; and 7 hours a week?
Harrys marginal cost of an hour of tennis is 1.5 percentage points. When Harry increases
the time he plays tennis from 2 hours to 4 hours, his gra
What generates economic growth?
The two key factors that generate economic growth are technological change
and capital accumulation. Technological change allows an economy to
produce more with the same amount of limited resources, Capital
Why does the PPF bow outward and what does that imply about the
relationship between opportunity cost and the quantity produced?
Some resources are better suited to produce one type of good or service, like
pizza. Other resources are better suited to prod
How does the production possibilities frontier illustrate scarcity?
The unattainable combinations of production that lie beyond the PPF
illustrate the concept of scarcity. There simply are not enough resources to
produce any of these combinations of outpu
What is marginal benefit? How is it measured?
The marginal benefit from a good or service is the benefit received from
consuming one more unit of it. It is measured by what an individual is willing
to give up (or pay) for an additional that last unit.
Define marginal benefit, explain how it is measured, and explain why the data in the
table in does not enable you to calculate Brazils marginal benefit of food.
The marginal benefit of a good is the benefit received from consuming one more unit
of the goo