Critical Analysis Questions Chapters 1 & 2

Critical Analysis Questions Chapters 1 & 2

Grantham University

Critical Analysis Questions Chapters 1 & 2

Goods in the market economy are rationed through a price rationing mechanism. Products that cost are considered scarce. In order to consume the wanted goods, consumer’s will “engage in income-generating activities” which will afford them the extra income that is needed to obtain those desired good(s). (Gwartney, 6) This increase in income-generating actions benefits those who are on the receiving end of the production of the goods, services and resources that the desiring party produces in their attempt to make extra money to purchase those scarce resources.

While rationing is sometimes seen as a necessity, any certain grade is not commonly a scarcity. Grades are most commonly a reflection of each students work, but there are times where a teacher will only allow a certain amount of grades, but do offer a curve to suffice the restrictions. Instead, in an economics class grades are rationed by the nature of competition, against the student themselves. Grades are based on a point scale that evaluates the level of work they submitted. A grade is presented with an explanation for how their grade best represents their level of work. This form of rationing offers students a competitive edge against themselves. They are able to gauge their goals based on each assignment that contributes to their final grade.

Shawn can use marginal analysis to decide for or against his fourth serving at the lunch buffet by weighing the costs and benefits of indulging or disallowing another visit to the buffet line. While the palpable cost of the buffet is $10 “all you can eat” there are other “costs” to be considered. When “thinking at the margin”, the subject has already decided that the decision can go either way, that the decision is only one or two opposing thoughts away from falling either way. Yes, you will get...