Scarcity -- Assessment

Solve the following "mysteries" using what you have learned about the concept of scarcity:

1. By taking an airplane, one can go from point A to point B in one hour. The same trip takes 5 hours by bus. If the airfare is $30 and the bus fare is $10, which would be the cheaper mode of transportation for someone who could earn $2 per hour? For someone who could earn $10 per hour?

2. The acres of grass surrounding the Taj Mahal in Agra, India, are often cut by young women who use kitchen blades. Is this a low (or high) cost way to keep a lawn mowed?

3. Use the concept of opportunity cost to explain why the rate of divorce among show business celebrities is so high.

Answer the following questions:

1. Explain why a choice must be made when given some land, and make a list of possible alternative uses of that land.

2. Identify examples of natural resources, human resources, and capital goods used in the production of a given product.

3. Predict how students' study habits would change if the grading system changed from letter grades to pass/fail, and to no grades?

4. Can a person choose to smoke and still be considered "rational"?