Solution Manual for Economics 13th Global Edition by Michael Parkin — Complete Answers & Explanations

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1. ListVsomeVexamplesVofVtheVscarcityVthatVyouVface.
ExamplesVofVscarcityVcommonVtoVstudentsVincludeVnotVenoughVincomeVtoVaffordVbothV
tuitionVandVaVniceVcar,VnotVenoughVlearningVcapacityVtoVstudyVforVbothVanVeconomics
VexamVandVaVchemistryVexamVinVoneVnight,VandVnotVenoughVtimeVtoVallowVextensiveV

studyingVandVextensiveVsocializing.
2. FindVexamplesVofVscarcityVinVtoday’sVheadlines.
AVheadlineVinVTheVBaltimoreVSunVonVJuneV20,V2017VwasV“DavisVSaysVSpecialVDeploy
mentVHelpedVStallVViolence.”VTheVstoryVpresentedVPoliceVCommissionerVKevinVDavisV
statingVthatVaVweek-
longVdeploymentVofVuniformedVpoliceVofficersVonVtheVstreetsVofVBaltimoreVhelpedVredu
ceVshootingsVinVtheVcity.VButVtheVstoryVpointedVoutVtheVroleVofVscarcityVwhenVCommi
ssionerVDavisVsaidVthatV“theVdeploymentVwasVnotVsustainableVoverVtheVlongVterm”Vdue
VtoVitsVcost.

3. FindVanVexampleVofVtheVdistinctionVbetweenVmicroeconomicsVandVmacroeconomicsVinVtoday’s
headlines.

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Microeconomics:VOnVJuneV20,V2017VaVheadlineVinVEastVBayVTimesVwasV“RealityVvsVF
antasy:VFTCVtoVBlockVFanDuel-
DraftKingsVMerger.”VThisVstoryVcoversVaVmicroeconomicVtopicVbecauseVitVdiscussesVh
owVtwoVon-
lineVfantasyVsportsVsites,VwhichVwereVtryingVtoVmerge,VnowVfacedVoppositionVbyVtheVF
ederalVTradeVCommissionV(FTC)VwhichVannouncedVitVwouldVchallengeVtheVmerger.VM
acroeconomics:VOnVJuneV20,V2017,VaVheadlineVinVTheVWallVStreetVJournalVwasV“Ryan
VTalksVUpVLikelihoodVofVTaxVOverhaul.”VThisVstoryVcoversVaVmacroeconomicVtopicVb

ecauseVitVconcernsVtaxesVthatVaffectVeveryVbusinessVandVindividualVinVtheVentireVecono
PageV43
my.

1. DescribeVtheVbroadVfactsVaboutVwhat,Vhow,VandVforVwhomVgoodsVandVservicesVareVprodu
ced.V WhatVgetsVproducedVisVsignificantlyVdifferentVtodayVthanVinVtheVpast.VTodayVthe
VU.S.VeconomyVproducesVmoreVservices,VsuchVasVmedicalVoperations,Vteaching,VandVha

irVstyling,VthanVgoods,VsuchVasVpizza,Vautomobiles,VandVcomputers.VHowVgoodsVandVs
ervicesVareVproducedVisVbyVbusinessesVdeterminingVhowVtheVfactorsVofVproduction,Vlan
d,Vlabor,VcapitalVandVentrepreneurship,VareVcombinedVtoVmakeVtheVgoodsVandVservices
VweVconsume.VLandVincludesVallVnaturalVresources,VbothVrenewableVnaturalVresourcesV

suchVasVwood,VandVnonrenewableVnaturalVresourcesVsuchVasVnaturalVgas.VLabor’sVqual
ityVdependsVonVpeople’sVhumanVcapital.VInVtheVU.S.Veconomy,VhumanVcapitalVobtaine
dVthroughVschoolingVhasVincreasedVoverVtheVyears
withVfarVmoreVpeopleVcompletingVhighVschoolVandVattendingVcollegeVthanVinVpastVyears
.VFinally,VforVwhomVareVgoodsVandVservicesVtoVbeVproducedVdependsVonVtheVwayVinco
meVisVdistributedVto
U.S.Vcitizens.VThisVdistributionVisVnotVequal;VtheV20VpercentVofVpeopleVwithVtheVlowes
tVincomeVearnVaboutV5VpercentVofVtheVnation’sVtotalVincomeVwhileVtheV20VpercentVof
VpeopleVwithVtheVhighestVincomesVearnVaboutV50VpercentVofVtotalVincome.VOnVtheVav

erage,VmenVearnVmoreVthanVwomen,VwhitesVmoreVthanVnon-
whites,VandVcollegeVgraduatesVmoreVthanVhighVschoolVgraduates.
2. UseVheadlinesVfromVtheVrecentVnewsVtoVillustrateVtheVpotentialVforVconflictVbetweenVsel
f-interestVandVtheVsocialVinterest.
OneVexampleVofVanVissueVconcernsVtheVuseVofVaVschoolVboard’sVcreditVcardVtoVmakeV
personalVpurchases.VAVJuneV20,V2017VheadlineVfromVStarVTribuneVwasV“ShakopeeVBoa
rdVApprovesVSuperintendent’sVResignationVWillVPayVHimV$50,000.”VThisVstoryVdiscuss
esVtheVsuperintendent’sVuseVofVaVschoolVboardVcreditVcardVtoVbuyVitemsVsuchVasVaVtel
evisionVandVtripVto

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Nashville.VTheVsuperintendentVwasVfollowingVhisVself-
interestVbecauseVheVmayVnotVhaveVrepaidVtheVpurchasesVhadVtheyVnotVbeenVuncovered.
VTheVschoolVboardVchairVsaidV“InVlightVofVtheVcurrentVissuesVfacingVtheVschoolVdistrict

,VtheVschoolVboardVfeelV(sic)VthatVaVchangeVinVleadershipVisVwarranted.”VTheVchairVbeli
evesVthatVtheVsocialVinterestVisVservedVbyVhavingVaVnewVsuperintendentVwithoutVtheViss
ueVofVmisuseVofVaVcreditVcardVhangingVoverVhisVorVherVhead.
PageV46
1. ExplainVtheVideaVofVaVtradeoffVandVthinkVofVthreeVtradeoffsVthatVyouVhaveVmadeVtoday.
AVtradeoffVreflectsVtheVpointVthatVwhenVsomeoneVgetsVoneVthing,VsomethingVelseVmust
VbeVgivenVup.VWhatVisVgivenVupVisVtheVopportunityVcostVofVwhateverVisVobtained.VThr

eeVexamplesVofVtradeoffsVthatVareVcommonVtoVstudentsVinclude:Va)VWhenVaVstudentVsl
eepsVinVratherVthanVgoingVtoVhisVorVherVearlyVmorningVeconomicsVclass,VtheVstudentVt
radesVoffVadditionalVsleepVforVstudyVtime.VTheVopportunityVcostVofVtheVdecisionVisVaVl
owerVgradeVonVtheVexam.Vb)VWhenVaVstudentVrunningVlateVforVclassVparksVhisVorVher
VcarVillegally,VtheVstudentVtradesVoffVsavingVtimeVforVtheVriskVofVaVticket.VTheVpotenti

alVopportunityVcostVofVtheVdecisionVisVtheVgoodsVandVservicesVthatVcannotVbeVpurchase
dVifVtheVstudentVreceivesVanVexpensiveVparkingVticket.Vc)VAVstudentVtradesVoffVhigherV
incomeVbyVspendingVtimeVduringVtheVdayVworkingVatVaVpart-
timeVjobVforVlessVtimeVspentVatVleisureVtimeVandVstudy.VTheVopportunityVcostVforVtheV
higherVincomeVisVlessVleisureVandVlowerVgradesVinVclasses.
2. ExplainVwhatVeconomistsVmeanVbyVrationalVchoiceVandVthinkVofVthreeVchoicesVthatVyou’veVmade
todayVthatVareVrational.
AVrationalVchoiceVisVoneVthatVcomparesVtheVcostsVandVbenefitsVofVtheVdifferentVactions
VandVthenVchoosesVtheVactionVthatVhasVtheVgreatestVbenefitVoverVcostVforVtheVpersonV

makingVtheVchoice.
ThreeVrationalVchoicesVmadeVbyVstudentsVinclude:Va)VTheVchoiceVtoVskipVbreakfastVtoV
goVtoVclass.VInVthisVcaseVtheVbenefitVisVtheVhigherVgradeVinVtheVclassVandVtheVcostVisV
theVbreakfastVforgone.Vb)VTheVchoiceVtoVstopVtalkingVwithVaVfriendVonVtheVphoneVand
VstartVstudyingVforVanVimpendingVexam.VInVthisVcaseVtheVbenefitVisVtheVresultingVhighe

rVgradeVinVtheVclassVandVtheVcostVisVtheVconversationVforgone.Vc)VTheVchoiceVtoVdoVla
undryVtodayVratherVthanVwatchVtelevision.VInVthisVcaseVtheVbenefitVisVtheVfactVtheVstud
entVwillVhaveVcleanVclothesVtoVwearVandVtheVcostVisVtheVlossVofVtheVentertainmentVthe
VtelevisionVshowVwouldVhaveVprovided.

3. ExplainVwhyVopportunityVcostVisVtheVbestVforgoneValternativeVandVprovideVexamplesV
ofVsomeVopportunityVcostsVthatVyouVhaveVfacedVtoday.