Changes

2.  Imagine that your family has two options for dinner:  eat at home, or go out to eat at McDonald's.  Which option incurs more transaction costs?  Identify two specific transaction costs.  Which option is cheaper for your family, and why?

2.  Imagine that your family has two options for dinner:  eat at home, or go out to eat at McDonald's.  Which option incurs more transaction costs?  Identify two specific transaction costs.  Which option is cheaper for your family, and why?

:

:The option of choosing McDonald's instead of eating at home would cause more transaction costs. The main transaction costs would be the cost of the gas and the time that it would take to get there. You will also have to pay for the service that you receive from the McDonald's employees. To eat at home would be a much cheaper option as there are hardly any transaction costs.  (Isaac)

3.  Define the concept of "scarcity" in your own words, and give an example of how an increase in scarcity for a good or service increases its price.  Your example might be a World Series ticket (a good) or a special medical operation (a service), or anything else you can think of that is "scarce" in an economic sense.  Extra credit:  when do people exaggerate scarcity in their minds?

3.  Define the concept of "scarcity" in your own words, and give an example of how an increase in scarcity for a good or service increases its price.  Your example might be a World Series ticket (a good) or a special medical operation (a service), or anything else you can think of that is "scarce" in an economic sense.  Extra credit:  when do people exaggerate scarcity in their minds?