What are scarce resources? Why are economic agents concerned with the allocation of these resources?
What will be an ideal response?
Scarce resources are resources for which the quantity that people want exceeds the quantity that is freely available. Economic agents need to satisfy their unlimited wants in a world of limited resources. This makes it important for them to understand how these scarce resources are to be used and distributed in order to optimize allocation.
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Suppose a firm in a competitive market produces and sells 8 units of output and has a marginal revenue of $8 . What would be the firm's marginal revenue if it instead produced and sold 4 units of output?
a. $2 b. $8 c. $32 d. $64
The average tax rate is:
A. change in taxes/change in taxable income. B. total taxes/total taxable income. C. the sum of the marginal tax rate and the rate of transfer payments. D. the tax on incremental income less the tax on total income.