CSET Social Science 116 fully
solved & updated(graded
A+)
Describe the casual relations between scarcity and choices, and
explain opportunity cost and marginal benefit and marginal cost. -
answer Economics is defined as the study of how scarce resources
are allocated to satisfy unlimited wants. Resources refer to the four
factors of production: labor, capital, land and entrepreneurship. The
fact that the supply of these resources is finite means that society
cannot have as much of everything that it wants. There is a
constraint on production and consumption and on the kinds of
goods and services that can be produced and consumed. Scarcity
means that chooses have to be made. If society decides to produce
more of one good, this means that there are fewer resources
available for the production of other goods. Assume a society can
produce two goods, good A and good B. The society uses resources
in the production of each good. If producing one unit of good A
results in an amount of resources used to produce three units of
good B than producing one more unit of good A costs three units of
good B. This cost is referred to as opportunity cost. Opportunity
cost is the value of the sacrificed alternative, the value of what had
to be given up in order to have the output of good A. Opportunity
cost does not just refer to production. Your opportunity cost of
studying math content is the value of what you are not doing
because you are studying and not doing the other thing you would
be doing instead. Every choice has an opportunity cost. Marginal
analysis is used in the study of economics. The term marginal
always means "the change in". There are benefits and costs
associated with every decision. The benefits are the gains or the
advantages of a decision or action. If we are talking about
production, the gains are the increases in output. If we are talking
about an additional hour of study, the gains are the amount of
material covered. There are also costs associated with each. The
production costs involve the cost of the re
Identify the difference between monetary and non-monetary
incentives and how changes in incentives cause changes in
,behavior. - answer Economics differs from other disciplines in that it
considers both monetary and non-monetary factors in decision
making. Monetary factors are those that have a dollar value
attached, like the cost of a unit input. These are referred to as
explicit costs of accounting costs. Non-monetary factors are
referred to as implicit costs. These include the opportunity costs or
the value of the sacrificed alternative. If we talk about
entrepreneurial activities, then we have to include the value of what
that factor could earn in its next best activity, because this is the
minimum amount of return that is required to keep that factor
performing its present function. If a factory can earn X dollars in its
next best alternative activity, then X dollars is the minimum amount
required to keep that factor performing its present activity. If it
doesn't earn those X dollars, it will shift into its next best
alternative activity. In calculating the total cost of decision, both
monetary and non-monetary factors have to be considered. The
economic costs of a decision will always be greater than the
accounting costs of the same decision, because economics includes
the non-monetary aspects of that decision. For example, using a
study guide has monetary and non-monetary costs associated with
it. The monetary cost is the cost of the guide. The non-monetary
costs are the value of what you are not doing because you are
studying. If there is a change in the cost of any of these monetary
or non-monetary factors or incentives, there will be a change in
behavior. For example, if teacher salaries double, obtaining that
teaching certificate becomes more important because it represents
greater future income. Therefore, the student will work harder to
obtain it. On the other hand, if your present salary doubles, then
you are not willing to sacrifice hour
Debate the role of private property as an incentive in conserving
and improving scarce resources, including renewable and
nonrenewable natural resources - answer Private property rights
play an important role in the conservation of resources and the
improvement in the allocation of scarce resources. We have
problems in our society that result from the lack of ownership of
resources, whether they are renewable or non-renewable. An
example of this is pollution. Why does air and water pollution occur?
Why do firms emit noxious emissions into the air, if they are not
restrained from doing so? Nobody owns the air; therefore the air is
treated as a free input into the production process. It doesn't cost
,the firm anything to use the air, in terms of monetary cost. The firm,
for the most part, just opens the doors and windows and expels the
obnoxious emission. If the firm couldn't do this, it would have to
devise and pay for a technology that would eliminate noxious
emissions. This represents a change in the production process
because of the increased equipment and labor activities required to
deal with the emissions that the firm no longer can just emit into
the air. If the firm had to pay for the air, it would have higher costs
of production. It wouldn't waste the air because it would have to
pay for it, as it pays for other input. It was the lack of ownership of
the air that leads to its use as a free good and its waste. Since
nobody owns the air and property rights can't be assigned, there is
inefficiency and a misallocation of resources associated with the
pollution. What can government do in this situation to try an correct
for misallocation of resources? Since they can't assign property
rights for the air, they can do things to put a penalty on the creation
of pollution. This is the theory behind fines for pollution and the
sale of pollution permits. They can also require the installation of
new technology to prevent the pollution. Each of these remedies is
an attempt to put a p
Describe and analyze the debate concerning the role of a market
economy versus a planned economy in establishing and preserving
political and personal liberty. - answer The roles of political and
personal liberty differ greatly depending on the economic role of the
government. The cause of the difference is the role of incentives. A
market economy functions on the basis of the financial incentive.
Firms use society's scarcest resources to produce the goods that
consumers want. Firms know they have a good that society wants
when they earn profit. Firms have a good that consumers dont want
when they consistently incur losses. Firms with consistent losses
eventually go out of business and those resources shift into other
industries. Producing goods that consumers do want. Consumers
vote for the goods and services they want with their dollars.
Technological progress is advanced because of the financial
incentives, whether they are personal or corporate. Firms invest in
research and development to find newer and more efficient
technologies that result in greater output at lower prices.
Individuals risk their own time and money on inventions because of
the potential financial rewards. They live in the structure of a
market economy that allows them the liberty of choosing what to do
, with their own resources within the confines of the law. Students
study whatever it is that they want to major in. There are more
scholarships available for certain occupations than others, but the
student can still obtain and education whether or not he/she wants
to be in one of those needed areas. In a planned economy,
particularly one based on public ownership of the means of
production, a planning entity substitutes for the market, to varying
degrees form partial to total. Instead of so summers voting with
their dollars, they have a Burr ratio entity trying to substitute for
the functions of supply and demand in making production decisions.
This is why panned economies are often plague by a misallocation of
r
Describe and analyze the relationship of the concepts of incentives
and substitutes to the law of supply and demand. - answer Supply
and demand perform important functions in a market economy.
Supply and demand make markets function efficiently. Supply is
defined as the quantity of a good or service that a producer is
willing to make available. Demand is defined as the quantity of
goods and services that a buyer is willing and able to buy. The
consumers equilibrium occurs where selling decisions of producers
are equal to the buying depictions of consumers, or where the
supply and demand curves intersect. This gives us the market
equilibrium price and quantity and results in an efficient allocation
of resources in accordance with consumer preferences. In other
words, producers use society's resources to produce the goods and
services that society wants. Producers know this because they have
a profitable business. Incentives and substitutes affect the market
situation. Incentives for consumers are things like sales, coupons,
rebates, etc. The results in increased sales for the firm, even
through there is a cost to the incentives. There is a change in the
market equilibrium situation and possibly market shares. The
increased demand coupled with brand loyalty means the firm will be
able to raise prices at some point and not lose their customers. On
the production side, incentives to innovate result in increased
output at lower costs, or more profit and greater market share for
the innovating firm. The individual inventor also experiences
financial rewards. Many firms reward employees who propose time
or money saving suggestions. Many of these effects are absent
without the use of markets. Supply and demand serve the function
of registering the wishes and decisions of producers and consumers
solved & updated(graded
A+)
Describe the casual relations between scarcity and choices, and
explain opportunity cost and marginal benefit and marginal cost. -
answer Economics is defined as the study of how scarce resources
are allocated to satisfy unlimited wants. Resources refer to the four
factors of production: labor, capital, land and entrepreneurship. The
fact that the supply of these resources is finite means that society
cannot have as much of everything that it wants. There is a
constraint on production and consumption and on the kinds of
goods and services that can be produced and consumed. Scarcity
means that chooses have to be made. If society decides to produce
more of one good, this means that there are fewer resources
available for the production of other goods. Assume a society can
produce two goods, good A and good B. The society uses resources
in the production of each good. If producing one unit of good A
results in an amount of resources used to produce three units of
good B than producing one more unit of good A costs three units of
good B. This cost is referred to as opportunity cost. Opportunity
cost is the value of the sacrificed alternative, the value of what had
to be given up in order to have the output of good A. Opportunity
cost does not just refer to production. Your opportunity cost of
studying math content is the value of what you are not doing
because you are studying and not doing the other thing you would
be doing instead. Every choice has an opportunity cost. Marginal
analysis is used in the study of economics. The term marginal
always means "the change in". There are benefits and costs
associated with every decision. The benefits are the gains or the
advantages of a decision or action. If we are talking about
production, the gains are the increases in output. If we are talking
about an additional hour of study, the gains are the amount of
material covered. There are also costs associated with each. The
production costs involve the cost of the re
Identify the difference between monetary and non-monetary
incentives and how changes in incentives cause changes in
,behavior. - answer Economics differs from other disciplines in that it
considers both monetary and non-monetary factors in decision
making. Monetary factors are those that have a dollar value
attached, like the cost of a unit input. These are referred to as
explicit costs of accounting costs. Non-monetary factors are
referred to as implicit costs. These include the opportunity costs or
the value of the sacrificed alternative. If we talk about
entrepreneurial activities, then we have to include the value of what
that factor could earn in its next best activity, because this is the
minimum amount of return that is required to keep that factor
performing its present function. If a factory can earn X dollars in its
next best alternative activity, then X dollars is the minimum amount
required to keep that factor performing its present activity. If it
doesn't earn those X dollars, it will shift into its next best
alternative activity. In calculating the total cost of decision, both
monetary and non-monetary factors have to be considered. The
economic costs of a decision will always be greater than the
accounting costs of the same decision, because economics includes
the non-monetary aspects of that decision. For example, using a
study guide has monetary and non-monetary costs associated with
it. The monetary cost is the cost of the guide. The non-monetary
costs are the value of what you are not doing because you are
studying. If there is a change in the cost of any of these monetary
or non-monetary factors or incentives, there will be a change in
behavior. For example, if teacher salaries double, obtaining that
teaching certificate becomes more important because it represents
greater future income. Therefore, the student will work harder to
obtain it. On the other hand, if your present salary doubles, then
you are not willing to sacrifice hour
Debate the role of private property as an incentive in conserving
and improving scarce resources, including renewable and
nonrenewable natural resources - answer Private property rights
play an important role in the conservation of resources and the
improvement in the allocation of scarce resources. We have
problems in our society that result from the lack of ownership of
resources, whether they are renewable or non-renewable. An
example of this is pollution. Why does air and water pollution occur?
Why do firms emit noxious emissions into the air, if they are not
restrained from doing so? Nobody owns the air; therefore the air is
treated as a free input into the production process. It doesn't cost
,the firm anything to use the air, in terms of monetary cost. The firm,
for the most part, just opens the doors and windows and expels the
obnoxious emission. If the firm couldn't do this, it would have to
devise and pay for a technology that would eliminate noxious
emissions. This represents a change in the production process
because of the increased equipment and labor activities required to
deal with the emissions that the firm no longer can just emit into
the air. If the firm had to pay for the air, it would have higher costs
of production. It wouldn't waste the air because it would have to
pay for it, as it pays for other input. It was the lack of ownership of
the air that leads to its use as a free good and its waste. Since
nobody owns the air and property rights can't be assigned, there is
inefficiency and a misallocation of resources associated with the
pollution. What can government do in this situation to try an correct
for misallocation of resources? Since they can't assign property
rights for the air, they can do things to put a penalty on the creation
of pollution. This is the theory behind fines for pollution and the
sale of pollution permits. They can also require the installation of
new technology to prevent the pollution. Each of these remedies is
an attempt to put a p
Describe and analyze the debate concerning the role of a market
economy versus a planned economy in establishing and preserving
political and personal liberty. - answer The roles of political and
personal liberty differ greatly depending on the economic role of the
government. The cause of the difference is the role of incentives. A
market economy functions on the basis of the financial incentive.
Firms use society's scarcest resources to produce the goods that
consumers want. Firms know they have a good that society wants
when they earn profit. Firms have a good that consumers dont want
when they consistently incur losses. Firms with consistent losses
eventually go out of business and those resources shift into other
industries. Producing goods that consumers do want. Consumers
vote for the goods and services they want with their dollars.
Technological progress is advanced because of the financial
incentives, whether they are personal or corporate. Firms invest in
research and development to find newer and more efficient
technologies that result in greater output at lower prices.
Individuals risk their own time and money on inventions because of
the potential financial rewards. They live in the structure of a
market economy that allows them the liberty of choosing what to do
, with their own resources within the confines of the law. Students
study whatever it is that they want to major in. There are more
scholarships available for certain occupations than others, but the
student can still obtain and education whether or not he/she wants
to be in one of those needed areas. In a planned economy,
particularly one based on public ownership of the means of
production, a planning entity substitutes for the market, to varying
degrees form partial to total. Instead of so summers voting with
their dollars, they have a Burr ratio entity trying to substitute for
the functions of supply and demand in making production decisions.
This is why panned economies are often plague by a misallocation of
r
Describe and analyze the relationship of the concepts of incentives
and substitutes to the law of supply and demand. - answer Supply
and demand perform important functions in a market economy.
Supply and demand make markets function efficiently. Supply is
defined as the quantity of a good or service that a producer is
willing to make available. Demand is defined as the quantity of
goods and services that a buyer is willing and able to buy. The
consumers equilibrium occurs where selling decisions of producers
are equal to the buying depictions of consumers, or where the
supply and demand curves intersect. This gives us the market
equilibrium price and quantity and results in an efficient allocation
of resources in accordance with consumer preferences. In other
words, producers use society's resources to produce the goods and
services that society wants. Producers know this because they have
a profitable business. Incentives and substitutes affect the market
situation. Incentives for consumers are things like sales, coupons,
rebates, etc. The results in increased sales for the firm, even
through there is a cost to the incentives. There is a change in the
market equilibrium situation and possibly market shares. The
increased demand coupled with brand loyalty means the firm will be
able to raise prices at some point and not lose their customers. On
the production side, incentives to innovate result in increased
output at lower costs, or more profit and greater market share for
the innovating firm. The individual inventor also experiences
financial rewards. Many firms reward employees who propose time
or money saving suggestions. Many of these effects are absent
without the use of markets. Supply and demand serve the function
of registering the wishes and decisions of producers and consumers
