Question

There will be 2 discussion questions for this module:

1. What is the difference between wanting a good/service and needing a good/service. Give a professional example (if you do not have a professional example, use a personal example) of a scarcity you have experienced.

2. Assume that Jamaica and Norway can switch between producing coolers and producing radios at a constant rate. The following table shows the number of coolers or number of radios each country can produce in one day. (Thoroughly study comparative advantage - if you do not understand, please let me know.)

Output Produced in One Day
Coolers	Radios

Jamaica

12

6

Norway

24

3

Refer to the table above - Jamaica’s opportunity cost of one cooler is

a. 0.5 radios, and Norway’s opportunity cost of one cooler is 0.125 radios.

b. 0.5 radios, and Norway’s opportunity cost of one cooler is 8 radios.

c. 2 radios, and Norway’s opportunity cost of one cooler is 0.125 radios.

d. 2 radios, and Norway’s opportunity cost of one cooler is 8 radios.

Answer 1

Answer 1:

Wanting a good or service means having a desire for that good or service. Wants are not necessary for survival and an individual can do without them however having them would give a higher satisfaction. An example of this can be a car. It is not necessary for survival but having it would give a higher satisfaction.

Needing a good or service means that a good or service are necessary for survival. These are the goods and services that an individual have to have. For example Food. An individual cannot survive without it and it is required for survival.

Answer 2: A

Jamaica opportunity cost of cooler = 6/12 = 0.5 radios

Norway opportunity cost of cooler = 3/24 = 0.125 radios.

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