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Microeconomics 1st Edition by Dean Karlan,Jonathan Morduch
Edition 1ISBN: 978-1260566642Microeconomics 1st Edition by Dean Karlan,Jonathan Morduch
Edition 1ISBN: 978-1260566642 Exercise 1
Think about how and why goods and resources are scarce. Goods and resources can be scarce for reasons that are inherent to their nature at all times, temporary or seasonal, or that are artificially created. Separate the goods listed below into two groups; indicate which (if any) are artificially scarce (AS), and which (if any) are inherently scarce (IS)
a. air of any quality _____
b. land _____
c. patented goods _____
d. original Picasso paintings _____
a. air of any quality _____
b. land _____
c. patented goods _____
d. original Picasso paintings _____
Explanation
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Verified
Scarce resource:
Scarce resources are those resources which are limited in availability. Some of the resources are limited in supply in nature which is known as inherently scarce. On the other hand, supply of goods would be limited due to the seasonal or legally protected which is known as artificial scarce.a.
Air of any quality:
Air of any quality is the natural resource exists around the world. It is not possible to restrict a person to access the air. Thus, air of any quality is not the scarce resource.b.
Land:
Land is limited in supply. Since it is impossible to increase the additional land with the existing land it is inherently scarce.c.
Patented goods:
Supply of patented goods supply is restricted by the law. Since the scarcity is made due to the law, it is artificially scarce.d.
Original 'P' paintings:
The painter 'P' is no more. Thus, the supply of original 'P' paintings is limited. It is not possible to increase the additional number of original paintings. Thus, it is inherently scarce.
Scarce resources are those resources which are limited in availability. Some of the resources are limited in supply in nature which is known as inherently scarce. On the other hand, supply of goods would be limited due to the seasonal or legally protected which is known as artificial scarce.a.
Air of any quality:
Air of any quality is the natural resource exists around the world. It is not possible to restrict a person to access the air. Thus, air of any quality is not the scarce resource.b.
Land:
Land is limited in supply. Since it is impossible to increase the additional land with the existing land it is inherently scarce.c.
Patented goods:
Supply of patented goods supply is restricted by the law. Since the scarcity is made due to the law, it is artificially scarce.d.
Original 'P' paintings:
The painter 'P' is no more. Thus, the supply of original 'P' paintings is limited. It is not possible to increase the additional number of original paintings. Thus, it is inherently scarce.
Microeconomics 1st Edition by Dean Karlan,Jonathan Morduch
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