Answer:
1. Briefly describe the main difference between "scarcity" and "shortage".
Scarcity is the general condition of all human societies that arises from the fact that human needs are always greater than resources available.
Shortage occurs when the supply of a good does not meet demand at a specific point in time. For this reason, shortage can be ended if more of the good is supplied.
2. How does What? How? and For Whom? (questions that all societies must answer) a direct result of dealing with the problem of scarcity?
Because resources are limited, societies have to ask what to produce (and what to forgo), how to produce (how to use limited resources as efficiently as possible), and for whom (how to distribute the goods and services).
3. What could a producer (makes G&S and sells them in product markets) do if there was a shortage of one of the factors of production?
Because a shortage of a factor of production raises costs, the producer can either increase prices, or reduce production.
4. What point on the Production Possibilities Model shows (a) unemployment? (b) inflation? (c) future economic growth (d) To which point is the U.S. Economy closest TODAY?
The model shows the possibilities of future eocnomic growth with the available resources. The U.S. Economy is very efficient and developed and as a result, it is close to the efficient points on the production possibilities frontier curve.
5. Have you ever waited in a LONG line just to get some product (good or service)? Explain how that is a result of scarcity/shortage?
A common good that sometimes people have to wait in lines for is prescription drugs. This is a result of shortage because at any point in time, the supply of prescription drugs is higher than demand.
