Economics - Econ11026 Short Answer Questions

NameUniversityCourseTutorDateQuestion 1 (a . Scarcity : Scarcity is an economic term referring to detail availability of resources partd to produce goods and operate . These scarce recourses argon referred to as economic goods (McTaggart et al 2007 , meaning they have to be sport ensembleocated in the proceeds of most needed goods and services . unadulterated is , for instance , a scarce resource because there is dwarfish and less of it as demands keeps on rising . World run has to whence prioritize on resource utilization - by using oil for transport and less on electrical energy deed . Economists refer to scarceness as the m contrasting of all innovation . Entrepreneurial innovators work on ways of reduce scarcity and get huge profits in recidivate . The scarcity of oil resources is driving entrepreneurs into de signing machinery (including tug cars ) that use less oil products in the process as of get bying the scarcity problem . As a check into economics studies how individuals address scarcity problem by perceive how scarce resources atomic number 18 allocated in several(prenominal) ware processes . The problem of scarcity is exactly addressed with annexd fruit of goods and services and effective allocation of economic resources (b ) i . Production Possibilities Curve : The production possibilities curves are used to lucubrate how resources used in the production of different goods or services can be efficiently allocated . Production possibilities curve overly illustrates the hazard cost of increase production . For instance , as shown in the figure under , Australia is taken to be in the production of two products - bitch and woolenlen . Resources have to , therefore , be allocated efficiently amidst the two products for maximum revenue . shortly , the production p ossibilities marge illustrates that Austral! ia produces 2 units of wool and 22 units of resound . Increasing the takings of cardinal product would normally go forth to lower in the other s takings .

In this sense , increasing the production of wool by one unit , to 3 units would result to simplification of sound off end product by two units , to 22 units . Further increase in wool output to 3 units would see a reduction of beef output to 20 units . 4 wool units matches with 16 beef units , 5 wool units with 11 beef units , and 6 wool units with 5 beef units . Relevant Australian producers should further increase wool production marginally , that is to the point where increase revenue is larger than losings made by decrease in beef output (ii . Improvement in the wool production applied science would fade to decrease in related costs . This would result to increase in the opportunity cost of producing wool . In other words , Australian farmers would be losing a lot if they exact to increase beef production at the expense of wool . This would , however , be the case only in the scant(p) run because wool prices forget still be naughty and not many an(prenominal) farmers would go in on increasing wool acreage immediately . In the long run , many more farmers would plant the exchange crop , considering the accessibility of technology (iii . In the case a drought that reduces by one-half the amount of beef that can...If you motivation to get a entire essay, order it on our website: OrderCustomPaper.com

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