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Chapter 2: Q 2.3 (page 27)

Discuss why obtaining increasing increments of any particular good typically entails giving up more and more units of other goods.

Short Answer

Expert verified

Because the to produce any one good we use the resources of the other good.

Step by step solution

01

Step 1. Definition of Scarcity.

The situation in which the resources are not sufficient to define all wants that people desire.

02

Step 2. Reason

Increasing increments of any particular good typically entail giving up more and more units of other goods because the resources of the other good are used in the production of the particular good. This leads to production tradeoffs between the two goods.

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Most popular questions from this chapter

During a debate on the floor of the U.S. Senate, Senator Creighton states, “Our nation should not devote so many of its fully employed resources to producing capital goods because we already are not producing enough consumption goods for our citizens.” Compared with the other labeled points on the diagram, which one could be consistent with the current product combination choice that Senator Creighton believes the nation has made?

Could the U.S. Navy expand its production of both ships and weapons after switching from missiles to rail-gun weapons? Explain your reasoning.

Suppose that in Fig 2-2, the nation currently is producing combination D in the table and on the graph of the production possibilities curve. What is the opportunity cost of producing 5 million more smartphones and moving to production combination C?

Suppose that in Fig 2-24, the nation with other wise the same background conditions as in Problem 2-23 currently has sufficient resources to produce combinations located along only the innermost production possibilities curve. If the nation produces no additional smartphones this year, will the intermediate-shifted PPC resulting from minimal economic growth or the farthest shifted PPC caused by more significant economic growth be more likely to apply next year?

Why might a person pay a firm at a mall to prepare her tax forms while she shops instead of allocating the same amount of time to finding a qualifying Free-File tax-preparation service?
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