REVIEW QUESTIONS: CHAPTER 1

1. It is indeed necessary that one country must always take into account a strong
national defense to reduce such uncertainties. Since that economics refers to the
allocation of scarce resources, bolstering our national defense requires the use of
many resources which enables a particular country to not produce others than
things that requires these resources. I would tell him that making our national
defense stronger is important but also the things might be given up. A critical
analysis should be done first before deciding to what we should do.

2. Since unemployment is very common in our country, a high rate of

unemployment would cause a country to decline its growth. Income is one of the
things that measures how wealthy a country is or how the growth of a country is
going. If there’s no income, he chances in producing goods are low for people
that cant afford to buy it. The curve in the production possibilities will decline as
a result of high unemployment rate.

3. It is important to fully use our resources and technology so that a country can
produce the most efficient and effective output rate to offer in the general public.
Both the total of output and types of output produced are vital for it measures
how well a nation is producing this goods. Proper distribution should also take
into account the allocation of resources optimally in the best possible way.

4. I think that our nation’s output should not always distributed according to income
but also to some other standards. Producing output should level the income of
people in a particular nation so that the distribution will be allocated optimally. It
is also best to produce output according to their basic needs to prevent wastes
since we only have scarce resources and most of the people in our nation couldn’t
even afford high-valued outputs.

5. Producers and consumers doesn’t need to sit down and discover market prices.
Instead the producers are liable for their own pricing of the output they made.
They just have to make it just and equitable to consumers so that both of them
could have the same benefits. I think that farmers makes are not that competitive
market since this market produce.