Solving for Scarcity

Why is scarcity important in economics?

Refer to the cost and revenue schedule below. What is the marginal revenue from increasing production to 3 units from 2 units of good?

Refer to the cost and revenue schedule below. What is the marginal cost of increasing production to 4 units from 3 units of good?

What is the difference between marginal analysis and cost-benefit analysis?

Dean is a senior high school student. To help save money for college, he decided to put up a lemonade stand in front of their house. What are the possible costs and benefits that entail this particular enterprise?

Why is efficiency important in economics?

What is cost-benefit analysis?

Which of the following situations illustrate the concept of efficiency?

A. A firm that used to produce 100 pizzas using 2 sacks of flour can now produce 110 pizzas using 3 sacks of flour

B. A firm that used to produce 100 pizzas using 2 sacks of flour can now produce 110 pizzas using 2 sacks of flour

C. A firm that used to produce 100 pizzas using 2 sacks of flour can now produce 90 pizzas using 3 sacks of flour

D. A firm that used to produce 100 pizzas using 2 sacks of flour can now produce 90 pizzas using 2 sacks of flour

Refer to the cost and revenue schedule below. What is the marginal cost of increasing production to 3 units from 2 units of good?

Which of the following situations illustrate the concept of efficiency?

1. Joey, who is a talented dressmaker, used to make 10 dresses a day using 50 yards of fabric. Now she can make 20 dresses a day using 100 yards of fabric

2. Dani, who is also a talented dressmaker, used to make 5 dresses a day using 50 yards of fabric. Now she can make 10 dresses a day using 50 yards of fabric

3. Star, a diligent student, used to take 4 hours in answering his Physics homework. Now he can finish the same homework in 2 hours. 

4. Rory, who is also a diligent student, used to take 2 hours in answering her Physics homework. Now she can finish the same homework in 6 hours

Logan runs a weekly newspaper in their small town. He writes all the articles by himself, while he pays his friend $20 for the illustrations and photographs on the paper. To publish the paper, he brings his work to a nearby publisher that prints the newspapers at the rate of $50 for 100 copies. Logan then sells each copy for $2.50. If Logan can sell all copies every week, what are the costs and benefits that he incurs from this weekly business?

Marty sews baseball caps for their local baseball team. Consider the cost and revenue schedule below. Identify Marty’s total benefits and total costs, and determine whether Marty should continue this business.

What is marginal analysis in economics?

What is efficiency?

What is scarcity?