1. Do nations with high living standards, as compared to low living standards, f
ID: 1133761 • Letter: 1
Question
1. Do nations with high living standards, as compared to low living standards, face the problem of scarcity? If you won $1 billion in a lottery (That is even more than Kylie has.), would you escape the scarcity problem? Explain 2. Suppose that you are the CFO of a company and you are currently developing a new product, the widget. Your company has already invested $100 million in developing the widget. Unfortunately, the development is not quite finished and to make matters worse marketing has informed you that another company will introduce a similar product that will reduced the expected sales of your new product to $50 million. If it would cost $10 million to finish development and make the product, should you go ahead and do so? What is the most that you should pay to complete development? 3. Back in 2010, President Barack Obama and Congress enacted a healthcare reform bill in the United States. Two goals of the bill were to provide more Americans with health insurance through subsidies for lower-income households financed by taxes on higher-income households and to reduce the cost of healthcare through various reforms in how healthcare is provided). a. How do these goals relate to equity and efficiency? b. How might healthcare reform increase productivity in the United States? c. How might healthcare reform decrease productivity in the United States? 4. You were planning to spend Saturday working at your part-time job, but a friend asks you to go a Dragon Football Game! What is the true cost of going to the game? Now suppose you had been planning to spend the day studying economics. What is the cost of going to the game in this case? 5. In the United States our Social security system provides income for people over the age of 65. If a recipient of Social security decides to work and earn some income, the amount he or she receives in Social security benefits is typically reduced. a. How does the provision of Social security affect people`s incentive to save while working? b. How does the reduction in benefits associated with higher earnings affect people`s incentive to work past age 65? 6. a. Everyone in the United States should be guaranteed the very best possible healthcare. If the United States were to follow that goal, how would it affect equity and how would it affect efficiency? b. If a worker is laid off from their job, they should be able to collect full unemployment benefits until they find a new job. If the United States were to follow that goal, how would it affect equity and how would it affect efficiency? How would your answer change if workers only received partial benefits? 7. This class will explore the macroeconomy and try to explain why variables have changed through time. In order to prepare you for this, go to FRED--the St. Louis Federal Reserve Bank's data depository and obtain a graph of the real GDP, the inflation rate, interest rates, and the unemployment rate since 1950. For each graph, provide a description of the changes that have occur over the period.
Explanation / Answer
Scarcity is the problem faced when the resources are getting depleted exponentially and since each and every country is rich in some sort of resources which that particular country can export to get other resources buy those countries where the living standards of citizens are high will deplete these resource whether indigenous or exported from other nation and hence countries with lower living standard will maintain their resources for a longer period of time.
The company has already spent $100 millions and now need $10 million more to complete the development phase and there is also a competition in the market which will decrease the sale to $50 million, therfore I think it is not advisable to spend more money in the development phase as even after developing the product we won’t get our initial development money back so there’s so use to spend any dime on this project.
a) Obama’s plan was a bullseye on various issues of equality as it takes up money from the pockets of various high earners and then they’ll use this money for the benefits of underprivileged and this will not totally buy will surely sorten the ridge between the economically rich and poor.
b) Healthcare review can increase productivity in US as it will encourage more people to go for their routine health checkup’s which will decrease the decrease and will improve the productivity of all section of the society as a health person can be used as an assist while an unhealthy person is a burden on society.
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