ECN-102-critical-thinking-questions.docx

Barroga, Veron Jasmin Rivera, Kyla Tamayo, Kyzelle Joy BS Economics 2A Critical Thinking Questions (ECN 102) 1. Explain why scarcity leads to tradeoffs. - In an ideal world characterized by thousands of resources, our every desire could not be a fulfilled. Regrettably, there is a finite...

Barroga, Veron Jasmin Rivera, Kyla Tamayo, Kyzelle Joy BS Economics 2A Critical Thinking Questions (ECN 102) 1. Explain why scarcity leads to tradeoffs. - In an ideal world characterized by thousands of resources, our every desire could not be a fulfilled. Regrettably, there is a finite time and limited resources which means that scarcity now forces tradeoffs to happen. And when resources scarce, humans tend to make difficult choices about how to allocate them. That's when opportunity cost becomes more significant because of our unlimited wants if we want to have a certain good, we have to give up something else to get it. Hence, competition now arises because people will go through a hole of needle to make sure their needs are satisfied. 2. Do economists have any particular expertise at making normative arguments? In other words, they have expertise at making positive statements (i.e., what will happen) about some economic policy, for example, but do they have special expertise to judge whether or not the policy should be undertaken? - Economists are not naturally equipped to provide opinions or evaluations, on whether economic policies should be implemented or not; their main skill lies in offering insights analyzing and forecasting the outcomes of economic policies using real world research and economic theories. When discussing arguments -- which concern value judgments and opinions, about how the economy should be -- economists might offer insights stemming from their analysis of the situation at hand. However, these viewpoints may not be firmly rooted in any expertise, in reasoning. Normative statements cannot be proven true or false through testing; unlike statements that rely on data and evidence, for verification. - Simply put economists have the tools to study and forecast results (economics) but they lack the authority to determine if these results are good or if actions should be taken (normative economics) as such decisions involve personal values and opinions. 3. A consultant works for P200 per hour. She likes to eat vegetables, but is not very good at growing them. Why does it make more economic sense for her to spend her time at the consulting job and shop for her vegetables? - It makes more economic sense for her to spend her time at her job and shop instead of growing vegetables because it is her next best alternative. Instead of growing her own vegetables -- which she is not very good at -- she should just invest her time on her job in order for her to earn money and be able to buy vegetables. This is an example of an opportunity cost -- where it is the value of what is given up when one makes a choice. 4. Explain why societies cannot make a choice above their production possibilities frontier and should not make a choice below it. - Choices beyond the PPF are impossible because they demand more resources or advanced technology than what is currently available. Operating beyond the PPF suggests an efficiency and productivity level that surpasses the economy's current capabilities. Choices within the PPF indicate underutilization of resources. Producing within the PPF means society misses the chance to produce more goods and services. The PPF helps understand production trade-offs and limitations. Operating on the PPF ensures efficient resource use, while choices beyond it are impossible and choices within it are inefficient. 5. As economics students, what do you think is the essence of studying economics in understanding the impact of the Covid-19 pandemic on the people and the global economy? - As economics students we can better grasp the interconnectedness of health crises and economic stability, preparing them for future challenges in policy-making and economic recovery strategies. It focuses on Health and Economic Interdependence where in the pandemic illustrated how public health crises can precipitate economic downturns. A robust health system is essential for maintaining economic activity, as seen when lockdowns and health measures led to significant GDP contractions globally. ‌ **References:** *Answers to: Do economists have any particular expertise at making normative arguments? In other words, they have expertise at making positive statements (i.e., what will happen) about some economic policy, for example, but do they have special expertise to judge whether or not the policy should be undertaken?* (2023). Class Ace. Fontinelle, A. (2019). *Positive vs. Normative Economics: What's the Difference?* Investopedia. Kenton, W. (2020, November 25). *Normative Economics*. Investopedia. https://www.investopedia.com/terms/n/normativeeconomics.asp Numerade. (2023). *Do economists have any particular expertise at making normative arguments? In other words, they have expertise at making positive statements (i.e., what will happen) about some economic policy, for example, but do they have special expertise to judge whether or not the policy should be undertaken?* Numerade.com. ‌