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Economics Homework One Answers - Student Fourteen (view source)
Revision as of 02:09, September 12, 2009
, 02:09, September 12, 2009Created page with 'Student: -AROM 1. An example of a good would be a vacuum cleaner; an example of a service would be those provided by a professional maid. 2. This depends on a number of factors...'
Student: -AROM
1. An example of a good would be a vacuum cleaner; an example of a service would be those provided by a professional maid.
2. This depends on a number of factors. For example, the obvious transaction cost to going to McDonald's is the time it takes to travel there. These costs can be reduced by circumstance, for example if you happen to already be next to the McDonald's on the way home from work or school. Cooking at home may also have transaction costs. For example, if you don't have any food in your refrigerator you need to travel to the store, wait in line, and bag and unbag groceries before you can cook. This may mean that the transaction costs to cooking at home are higher than the transaction costs of going to McDonalds. One of the transaction costs of cooking at home is also learning how to cook, which takes time and effort that could be spent doing other things. For example, someone could not have a job because of the time it took them to learn to cook, so cooking at home would actually have a negative net benefit. If one doesn't already know how to cook this may make going to McDonald's the more economical option. If one already has the food, the expertise, and all the necessary equipment, there are fewer transactions to cooking at home than going to McDonalds. Otherwise, there may be more transactions costs to staying at home.
3. Scarcity occurs when people's wants and needs surpass the supply of any good or service. Example: A decrease in the number of doctors would make health care more scarce and the remaining doctors could charge higher fees.
Extra credit: People exaggerate scarcity in their minds when they are selling things that have personal value to them. In their mind an ordinary item can become "one of a kind" or "priceless."
4. The invisible hand is a metaphor for the collective natural effect of all individuals operating in their own self-interest. Example: If furniture makers try to make more money by making more furniture, the invisible hand will make the price of wood increase as trees are chopped down and become scarcer.
5. Luke 16: 1-13. The economic point is an illustration of the exchange of goods and services. By giving away the resources of his master, the steward was able to purchase lodging for himself. The spiritual lesson is that wasting anothers money may be good on earth but not good in the eyes of God.
Extra Credit: Matthew was a tax collector.
6. Caveat Emptor: Buyer beware means that the buyer of a good is responsible for whatever he purhcases and he is responsible for making sure it isn't harmful to him and is actually what it is represented to be.
1. An example of a good would be a vacuum cleaner; an example of a service would be those provided by a professional maid.
2. This depends on a number of factors. For example, the obvious transaction cost to going to McDonald's is the time it takes to travel there. These costs can be reduced by circumstance, for example if you happen to already be next to the McDonald's on the way home from work or school. Cooking at home may also have transaction costs. For example, if you don't have any food in your refrigerator you need to travel to the store, wait in line, and bag and unbag groceries before you can cook. This may mean that the transaction costs to cooking at home are higher than the transaction costs of going to McDonalds. One of the transaction costs of cooking at home is also learning how to cook, which takes time and effort that could be spent doing other things. For example, someone could not have a job because of the time it took them to learn to cook, so cooking at home would actually have a negative net benefit. If one doesn't already know how to cook this may make going to McDonald's the more economical option. If one already has the food, the expertise, and all the necessary equipment, there are fewer transactions to cooking at home than going to McDonalds. Otherwise, there may be more transactions costs to staying at home.
3. Scarcity occurs when people's wants and needs surpass the supply of any good or service. Example: A decrease in the number of doctors would make health care more scarce and the remaining doctors could charge higher fees.
Extra credit: People exaggerate scarcity in their minds when they are selling things that have personal value to them. In their mind an ordinary item can become "one of a kind" or "priceless."
4. The invisible hand is a metaphor for the collective natural effect of all individuals operating in their own self-interest. Example: If furniture makers try to make more money by making more furniture, the invisible hand will make the price of wood increase as trees are chopped down and become scarcer.
5. Luke 16: 1-13. The economic point is an illustration of the exchange of goods and services. By giving away the resources of his master, the steward was able to purchase lodging for himself. The spiritual lesson is that wasting anothers money may be good on earth but not good in the eyes of God.
Extra Credit: Matthew was a tax collector.
6. Caveat Emptor: Buyer beware means that the buyer of a good is responsible for whatever he purhcases and he is responsible for making sure it isn't harmful to him and is actually what it is represented to be.