Which of the following is NOT a scarce economic resource?
Choose 1 answer:
(A) Capital

B Labor
(c) Land
(D) Water
(E) Money

Question

Which of the following is NOT a scarce economic resource?
Choose 1 answer:
(A) Capital

B Labor
(c) Land
(D) Water
(E) Money

Accepted Answer

Sure, let's address the questions one by one. ### Question 1: Specialization and Trade #### Absolute Advantage and Comparative Advantage ∻Solution∻ ‖ a ⋮ Absolute Advantage: Absolute advantage refers to the ability of a party to produce more of a good or service with the same amount of resources compared to another party. ‖ ‖ b ⋮ Comparative Advantage: Comparative advantage occurs when a party can produce a good or service at a lower opportunity cost compared to another party. ‖ ‖ c ⋮ Specialization: Specialization involves focusing on the production of a particular good or service in which a party has a comparative advantage, leading to more efficient production and trade. ‖ ‖ d ⋮ Trade: Trade allows parties to exchange goods and services, benefiting from each other's comparative advantages and leading to overall economic gains. ‖ ∻Answer∻ ⚹ Comparative advantage is the key to understanding specialization and trade. ⚹ ∻Key Concept∻ ⚹ Comparative Advantage ⚹ ∻Explanation∻ ⚹ Comparative advantage allows parties to specialize in the production of goods and services they can produce most efficiently, leading to beneficial trade. ⚹ ### Question 2: Comparative Advantage in Production of Tacos and Cakes Let's assume the following production possibilities for Martha and Dave: - Martha can produce 10 tacos or 5 cakes in a day. - Dave can produce 6 tacos or 3 cakes in a day. ∻Solution∻ ‖ a ⋮ Martha's Opportunity Cost: The opportunity cost of producing 1 taco for Martha is $\frac{5 ext{ cakes}}{10 ext{ tacos}} = 0.5$ cakes. The opportunity cost of producing 1 cake is $\frac{10 ext{ tacos}}{5 ext{ cakes}} = 2$ tacos. ‖ ‖ b ⋮ Dave's Opportunity Cost: The opportunity cost of producing 1 taco for Dave is $\frac{3 ext{ cakes}}{6 ext{ tacos}} = 0.5$ cakes. The opportunity cost of producing 1 cake is $\frac{6 ext{ tacos}}{3 ext{ cakes}} = 2$ tacos. ‖ ‖ c ⋮ Comparative Advantage: Both Martha and Dave have the same opportunity cost for producing tacos and cakes. Therefore, neither has a comparative advantage in producing either good. ‖ ∻Answer∻ ⚹ Neither Martha nor Dave has a comparative advantage in producing tacos or cakes. ⚹ ∻Key Concept∻ ⚹ Opportunity Cost ⚹ ∻Explanation∻ ⚹ Comparative advantage is determined by lower opportunity costs, but in this case, both Martha and Dave have identical opportunity costs for producing tacos and cakes. ⚹ ### Question 3: Scarce Economic Resources ∻Solution∻ ‖ a ⋮ Definition of Scarce Resources: Scarce resources are those that are limited in supply and cannot meet all the demands placed on them. ‖ ‖ b ⋮ Capital: Capital includes machinery, buildings, and tools used in production, which are limited. ‖ ‖ c ⋮ Labor: Labor refers to human effort used in production, which is also limited. ‖ ‖ d ⋮ Land: Land includes all natural resources used in production, which are finite. ‖ ‖ e ⋮ Water: Water is a natural resource that is limited in many regions. ‖ ‖ f ⋮ Money: Money itself is not a scarce resource; it is a medium of exchange and a measure of value. ‖ ∻Answer∻ ⚹ Money is NOT a scarce economic resource. ⚹ ∻Key Concept∻ ⚹ Scarce Resources ⚹ ∻Explanation∻ ⚹ Scarce resources are limited in supply and include capital, labor, land, and water. Money, however, is a medium of exchange and not inherently scarce. ⚹ I hope this helps! If you have any more questions, feel free to ask.◊How do scarcity of economic resources impact an economy's production possibilities frontier?⍭ Generate me a similar question◊

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