Description
Classify each of the following factors of production into one of the four resource categories used in economics, and identify the income return to the owners of each factor.
a. The scanner used to check out groceries in a supermarket
b. The instructor of this course
c. A pasture used for grazing a herd of cattle
d. A coffee urn used by a catering service
e. The person who just started her own lawn service company
f. The manager of a restaurant that is part of a national chain
g. The green field site ready for construction of a new big box store
What is meant by a direct and an inverse relationship between economic variables? Illustrate, using the accompanying graphs, how you think each of the following relationships would appear, and indicate whether each relationship is direct or inverse
.a. Inches of snow and sales of mittens
b. Tuition and students demanding to enroll in a university
c. Consumers purchasing the same amount of gasoline regardless of its price
d. Salaries and years of education
Think about the relationship between driving at higher speeds and the likelihood of injury in an automobile accident. How can this relationship be illustrated in one graph to make it appear that the likelihood of injury increases relatively little at higher speeds, and in another graph to make it appear that the likelihood of injury increases dramatically at higher speeds? What warning does this sound about basing a decision on a quick scan of the appearance of a line in a graph?