Solutions For Economics, 14th Edition Parkin (All Chapters included)
9 views 0 purchase
Course
Economics
Institution
Economics
Complete Solutions Manual for Economics, 14th Edition by Michael Parkin ; ISBN13: 9780137650620. Full Chapters included Chapter 1 to 31.
1.What is Economics?.
2.TheEconomic Problem.
3.Demand and Supply.
4.Elasticity.
5.Efficiency And Equity.
6.Government Actions in Markets.
7.Global Markets ...
Complete Chapter Solutions Manual
are included (Ch 1 to 31)
** Immediate Download
** Swift Response
** All Chapters included
, C h a p t e r 1 WHAT IS
ECONOMICS?
Answers to the Review Quiz
Page 2
1. List some examples of the scarcity that you face.
Examples of scarcity common to students include not enough income to afford both tuition and a nice car,
not enough learning capacity to study for both an economics exam and a chemistry exam in one night, and
not enough time to allow extensive studying and extensive socializing.
2. Find examples of scarcity in today’s headlines.
A headline in The New York Times on June 17, 2021 was “What is a Megadrought?” The story defined a
megadrought as a “period of extreme dryness that lasts for decades.” It then pointed out that the Western
United States has suffered from drought conditions since 2000 and because of climate change the drought
may continue. The entire story points out the role of scarcity because it is concerned with the scarcity of
water, which is a vital resource.
3. During the Covid-19 pandemic, what incentives did you face and how did you respond?
In some locales students and others faced incentives to wear a facemask, because if they did not wear a
mask they could not legally enter particular stores and if they did so anyway, they might be fined. Some
students and others faced the incentive to work remotely because that was the type of job being offered.
Many students faced the incentive to take classes remotely because this was how almost all classes were
offered.
4. Find an example of the distinction between microeconomics and macroeconomics in today’s
headlines.
Microeconomics: On June 17, 2021 a headline in East Bay Times was “The Housing Market Is So Hot
Buyers Are Paying $1 Million Over Asking Price.” This story covers a microeconomic topic because it
discusses how the choices of individuals and the interactions of the choices in the housing market have
forced prices higher. Macroeconomics: On June 17, 2021, a headline in The Wall Street Journal was “Fed
Pencils In Earlier Interest-Rate Increase.” This story covers a macroeconomic topic because it concerns
interest rates, which affects the national economy.
Page 7
1. Describe the broad facts about what, how, and for whom goods and services are produced.
What gets produced is significantly different today than in the past. Today the U.S. economy produces
more services, such as medical operations, teaching, and hair styling, than goods, such as pizza,
automobiles, and computers. How goods and services are produced is by businesses determining how the
factors of production, land, labor, capital and entrepreneurship, are combined to make the goods and
services we consume. Land includes all natural resources, both renewable natural resources such as wood,
and nonrenewable natural resources such as natural gas. Labor’s quality depends on people’s human
capital. In the U.S. economy, human capital obtained through schooling has increased over the years with
far more people completing high school and attending college than in past years. Finally, for whom are
goods and services to be produced depends on the way income is distributed to U.S. citizens. This
distribution is not equal; the 20 percent of people with the lowest income earn about 5 percent of the
nation’s total income while the 20 percent of people with the highest incomes earn about 50 percent of
, 2 CHAPTER 1
total income. On the average, men earn more than women, whites more than non-whites, and college
graduates more than high school graduates.
2. Give some examples to illustrate the potential for conflict between self-interest and the social
interest during the Covid-19 pandemic.
The decision whether to wear a facemask shows the potential conflict between self-interest and social
interest. It was in the self-interest of some people to not wear a mask, possibly because they felt the mask
was too constraining, but it was in the social interest to do so because it helped limit the spread of the
disease. Similarly, it was in the self-interest of owners and employees of bars and restaurants to remain
open at 100 percent capacity, but it was in the social interest to close them and, when they were allowed to
reopen, to do so at a reduced capacity. It was in the self-interest of some parents to have their child (or
children) attend school, perhaps because attendance helped the child learn or because the parents lacked
daycare, but it was in the social interest to have schools closed and use remote classes.
Page 10
1. Explain the idea of a tradeoff and think of three tradeoffs that you have made today.
A tradeoff reflects the point that when someone gets one thing, something else must be given up. What is
given up is the opportunity cost of whatever is obtained. Three examples of tradeoffs that are common to
students include: a) When a student sleeps in rather than going to his or her early morning economics
class, the student trades off additional sleep for study time. The opportunity cost of the decision is a lower
grade on the exam. b) When a student running late for class parks his or her car illegally, the student trades
off saving time for the risk of a ticket. The potential opportunity cost of the decision is the goods and
services that cannot be purchased if the student receives an expensive parking ticket. c) A student trades off
higher income by spending time during the day working at a part-time job for less time spent at leisure
time and study. The opportunity cost for the higher income is less leisure and lower grades in classes.
2. Explain what economists mean by rational choice and think of three choices that you’ve made
today that are rational.
A rational choice is one that compares the costs and benefits of the different actions and then chooses the
action that has the greatest benefit over cost for the person making the choice. Three rational choices made
by students include: a) The choice to skip breakfast to go to class. In this case the benefit is the higher
grade in the class and the cost is the breakfast forgone. b) The choice to stop talking with a friend on the
phone and start studying for an impending exam. In this case the benefit is the resulting higher grade in
the class and the cost is the conversation forgone. c) The choice to do laundry today rather than watch
television. In this case the benefit is the fact the student will have clean clothes to wear and the cost is the
loss of the entertainment the television show would have provided.
3. Explain why opportunity cost is the best forgone alternative and provide examples of some
opportunity costs that you have faced today.
When a decision to undertake one activity is made, often many alternative activities are no longer possible.
Often these activities are mutually exclusive so only the highest valued alternative is actually forgone. For
instance, the decision to go to a student’s 8:30 AM class eliminates the possibility of sleeping in during the
hour and of jogging during the hour. But in this case, it is impossible to both sleep in and to jog during the
hour, so the opportunity cost cannot be both activities. What is lost is only the activity that otherwise
would have been chosen—either sleeping in or jogging—which is whatever activity would have been
chosen, that is, the most highly valued of the forgone alternatives. For students, attending class, doing
homework, studying for a test are all activities with opportunity costs.
4. Explain what it means to choose at the margin and illustrate with three choices at the margin
that you have made today.
Choosing at the margin means choosing to do a little more or a little less of some activity. Three common
examples students encounter are: a) When a student faces a chemistry and an economics final exam in one
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller mizhouubcca. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $29.49. You're not tied to anything after your purchase.
