Discussion Questions #1 Pg. 13 3) Explain why a government policy maker cannot afford to ignore economic theory.

The reason government policy makers cannot afford to ignore economic theory is because economic theory helps to analyze policy options in order to test out possibilities a new policy can bring or result on the population. So in order to do this, economists are forced to deal with possibilities that have not actually occurred. For example, if the government wants to learn how to shorten periods of high unemployment or bring the economy back up, they would have to investigate how a new policy that has never been tried can help to resolve these issues. Often times, the data on the outcome can result in a different outcome than what is thought. But the economic theory helps to come up with possibilities that havent occurred in order to come up with the best policy for these problems. Pg. 37 1) Which are the two biggest national economies on earth? Why are they so much bigger than the others? The two biggest national economies on earth are the United States and the Peoples Republic of China. The reason why these two national economies are the largest is due to the fact that both have very populous areas in which most are contributed to the working production and technologies that are exported and imported throughout the rest of the countries. Also, the United States economy is so large is because we are a very rich country. Because American workers are among the most productive in the world and can produce more than $47,000 worth of goods and services for every living American. Also, both are the few advanced countries that can lead to more productivity and capitals. And both economies are also exceptionally privatized and closed since the United States provide up to about only 15% of the gross-domestic products. 2) What is meant by a factor of production? Have you ever sold any on the market? Factors of production of input are the labor, machinery, buildings, and natural resources used to make outputs, which are the goods and services that consumers and others want to acquire. Factors of production can include workers or job employees that help to provide services or goods to the consumers. For example, I am one type of factors of production because I have provided my time in works or jobs such as in a day care center of provided my services in a hospital. Also, another type of factors of production can be me selling auto parts on the market in order to produce goods such as cars or repairing cars. 4) Roughly speaking, what fraction of U.S. labor works in factories? In service businesses? In government? Roughly speaking, about 9.1% of the employment sector works in factories, which estimates about 1/10. In the service business, about 68.5% work in the service excluding the government and is about 7/10 of the workers. And the government has about 17.6%, which is about 2/10. Pg. 53 1) Discuss the resource limitations that affect: A. The poorest person on earth I think that the resource limitations wouldnt affect much on the poorest person on earth because he/she dont have much hard currency to buy resources. Also, the poorest person

wouldnt have much to give up for something else. Or it can affect he/she by limiting the food available for them to survive. So the limitation can work both ways by the severity of the deficit. B. Bill Gates, the richest person on earth For Bill Gates, the resource limitation can lead to him losing huge deficit of money because he would run out of resources to build chips or computers. On the other hand, Bill Gates may have all the money he have to survive for decades without relying on limited resources to survive. C.A farmer in Kansa For a farmer, the limited resources may result in the farmer having to give up some choices on his field. For example, the farmer may have to give up some workers in order for better quality fertilizers so that his products would be better. Or the farmer may have to give up better qualities of fertilizers in order to produce more products that are of lesser qualities. D. The government of Indonesia The government would have to control what they buy and how they should fund certain projects. Such that if they want one thing, they would have to think about giving up another thing for their project. For example, if Indonesia wants more airplanes and trains, they would have to give up on some boats and cars. 3) If you were to leave college, what things would change in your life? What, then, is the opportunity cost of your education? If I was to leave college, I wouldnt probably have a good enough job as I would have if I did went to college and earned a degree, which means the pay wouldnt be as high and the environment of the job may result in me being unhappy. The opportunity cost of my education would be that is I didnt went to college and started a job right away, I would be earning more money than compare to while having an education in college at the same time. Also there would be less financial stress on my family and ill be earning money right away.