Economics Homework One Answers - Student Eighteen

KristiM

1\. Good: Piano Service: Piano Lessons

Excellent.

2\. Assuming that we live on a farm and have raised our own meat, veggies, milk, eggs, etc. The monetary transaction costs would include those for purchasing the animals and feed. When eating at McDonald's we would be paying for the animals, feed for the animals, facilities, workers, butchering, processing for storage, freight, processing into McDonald's meals, and all the people involved in every step of this process. Obviously it will be much cheaper to eat at home with food we have grown ourselves. If we total the transaction costs regarding our time then the opposite would be true. We would have very little invested when we go to McDonald's. But we would have invested huge amounts of time to care for the animals, garden, harvest, butchering, etc. I think it basically comes down to whether or not we have more time or money.

McDonald's incurs more transaction costs. Driving to and from there, and consuming gas, is one example. Taxes are another. Your answer focuses on which is more expensive but does not explain specific examples of transaction costs (Minus 1).

3\. In economical terms, scarcity refers to a good or service that is not free. The degree of scarcity is determined by how many people want to purchase a particular good or service. When the availability of goods or services declines the price increases. An example of this would be if there were a big freeze in Florida and the oranges were destroyed. The availability of orange juice would go way down but the price would increase dramatically as people try to get there hands on the last can. An example of exaggerated scarcity can be seen today in the sales of guns and ammo. In our area, many people are concerned about government regulations of guns and ammo and believe that they will soon be outlawed. Consequently the stores are not able to keep these items in stock as they sell out as soon as each shipment comes in. Even though there are no regulations at this time, the people believe that it will happen and at that time guns and ammo will become very scarce. Interestingly the very thing they are afraid of, fear of scarcity, is becoming reality from the exaggerated scarcity in their minds.

Superb analysis.

4\. The invisible hand guides me to do whatever is best for myself and in the process it betters others. Take rentals/landlords for instance. If I am a landlord, my main concern is getting a big fat rent check in the mail each month. But in order to get the biggest, fatest check I will make sure my rentals are clean and safe and that I am there whenever any little thing breaks so that I can get the best renters who will send me that check each month. While my motivation maybe to increase my bottom line, my renters are benefiting by having a decent, clean place to live and a landlord who is quick to keep things in tip top shape.

Right.

5\. Luke 18:9-14 (New International Version)

9To some who were confident of their own righteousness and looked down on everybody else, Jesus told this parable: 10"Two men went up to the temple to pray, one a Pharisee and the other a tax collector. 11The Pharisee stood up and prayed about[a] himself: 'God, I thank you that I am not like other men—robbers, evildoers, adulterers—or even like this tax collector. 12I fast twice a week and give a tenth of all I get.' 13"But the tax collector stood at a distance. He would not even look up to heaven, but beat his breast and said, 'God, have mercy on me, a sinner.' 14"I tell you that this man, rather than the other, went home justified before God. For everyone who exalts himself will be humbled, and he who humbles himself will be exalted."

With riches comes the temptation to think that one is more important than others. It is true that rich people have more influence and higher positions than the poor. They do not have to spend their days trying to “survive” and can use their time to run companies, become government leaders, etc. But the temptation they have is to think that they are more important than all the “little” people who are actually doing the work that they have planned or governed. Without all those “little” people, the companies wouldn't manufacture anything, there wouldn't be a city to manage. In the end, it takes everyone, working together and each person doing their part for any organization to run smoothly. Jesus saw this problem in society but took it to a much deeper level. He was the King of the Universe. And yet he humbled himself and became a man to die for our sins. He was the perfect example of total humility and he expects that kind of humility from us if we want to be part of the His Kingdom.

Good.

6\. Carpe Diem: Seize the day. Typically I like to plan ahead for everything I may possibly have to purchase or do in the future. This eliminates “surprises”. This past week I had a situation arise that was a complete surprise and requited that I make a decision without being totally prepared emotionally or financially. I choose to “carpe diem” and made myself get prepared after the fact. I think in the end it will have been the best choice.

OK.

59/60. Good start!--Andy Schlafly 15:17, 13 September 2009 (EDT)

\--KristiM 11:21, 9 September 2009 (EDT)