Answer to Question #157402 in Economics for Jonathan

Question

1.Check Understanding What happens when a country’s resources are underutilized?

2. Drawing Conclusions Many high schools throughout the United States have faced a serious shortage of math and science teachers. Many prospective teachers choose to go into business and industry because of higher salaries. In some communities, businesses are “loaning” employees who want to teach part-time to schools to fill the math and science teacher gap. Does this scenario illustrate scarcity? Why or why not?

3. Applying Economic Concepts Consider the following entrepreneurs: Lucy, who runs an organic farm, and Ron, a sports superstar who owns several restaurants. Describe how they may have used entrepreneurship to establish and run their businesses.

4. Writing About Economics Develop an outline about the factors that influence production. Your outline should include all four factors: land, labor, capital, and entrepreneurship. Then use your outline to write a summary of the economic resources needed to produce goods and services.

5. In which category does each item below belong—microeconomics or macroeconomics? Why?

a. Studying statistics to see how well the economy is doing at creating jobs or increasing exports;

b. Studying statistics on gasoline sales and hotel bookings to explore the impact of higher gas prices on vacation plans.

Answer 1

1. If a country’s resources are underutilized, then the country produces below its production possibilities frontier (PPF).
2. It is not about scarcity, because employees move to other industries, where they can reach the higher salary, so it is optimal allocation of resources.
3. Lucy, who runs an organic farm, and Ron, a sports superstar who owns several restaurants may have used entrepreneurship to establish and run their businesses through using their knowledge and skills to start these businesses and become successful.
4. Economic growth only comes from increasing the quality and quantity of the factors of production, which consist of four broad types: land, labor, capital, and entrepreneurship. The factors of production are the resources used in creating or manufacturing a good or service in an economy.
5. Micro- or macroeconomics?

a. Studying statistics to see how well the economy is doing at creating jobs or increasing exports belongs to macroeconomics;

b. Studying statistics on gasoline sales and hotel bookings to explore the impact of higher gas prices on vacation plans belongs to microeconomics.