Economics - Econ11026 Short Answer Questions

NameUniversityCourseTutorDateQuestion 1 (a . Scarcity : Scarcity is an economic term referring to point availability of resources partd to produce goods and service . These scarce recourses argon referred to as economic goods (McTaggart et al 2007 , meaning they have to be fellate ensembleocated in the proceeds of most needed goods and services . raspy is , for instance , a scarce resource because there is fiddling and less of it as demands keeps on rising . World hurry has to consequently prioritize on resource utilization - by using oil for transport and less on electrical energy deed . Economists refer to scarceness as the m assorted of all innovation . Entrepreneurial innovators work on ship canal of reduce scarcity and get huge profits in recidivate . The scarcity of oil resources is driving entrepreneurs into designing machinery (including labour cars ) that use less oil products in the process as of get bying the scarcity problem . As a crystallize economics studies how individuals address scarcity problem by seeing how scarce resources atomic number 18 allocated in respective(prenominal) ware processes . The problem of scarcity is exactly addressed by means of annexd fruit of goods and services and effective allocation of economic resources (b ) i . Production Possibilities Curve : The production possibilities curves are used to ornament how resources used in the production of different goods or services can be efficiently allocated . Production possibilities curve besides illustrates the luck 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 woollen . Resources have to , therefore , be allocated efficiently amidst the two products for maximum revenue . soon , the produc tion possibilities marge illustrates that A! ustralia produces 2 units of wool and 22 units of bitch . Increasing the takings of wizard product would normally go forth to fall in the other s takings .

In this sense , increasing the production of wool by one unit , to 3 units would result to decrement of shout widening 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 in crease 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 give still be naughty and not many an(prenominal) farmers would put down on increasing wool acreage immediately . In the long run , many more farmers would plant the specie 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 involve to get a entire essay, order it on our website: OrderCustomPaper.com

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