11.) Explain how (if at all) each of the following events affects the location of a country’s production possibilities curve:

a. The quality of education increases – If the quality of education increases, schools should produce better educated workers suitable for white collar work. On the other hand, there may be a decrease in the amount of suitable workers for jobs that require physical labor.

b. The number of unemployed workers increases – The country’s productivity levels would more than likely fall since there are less employees to produce goods and services.

c. A new technique improves the efficiency of extracting copper from ore – Productivity should increase due to the ability to churn out more copper. A greater amount of ore will then be available on the market for purchase.

d. A devastating earthquake destroys numerous production facilities – Production levels will certainly fall from the destruction of needed facilities. Productivity will probably stay down until those facilities are rebuilt or unless other facilities produce more to compensate for losses.

1.) Contrast how a market system and a command economy try to cope with economic scarcity.

The market system relies on determining what is in demand. The means of production are not owned by the government, but rather by businesses and people. Anyone is free to buy or sell goods, services, and resources based on their needs and businesses make the decision concerning what they wish to produce. On the contrary, a command economy is ran by the government. The government decides what goods will be made and how many, and it decides how to divide up the resources. In the market system, resources are shared by multiple parties rather than one entity.

10.) In a sentence, describe the meaning of the phrase “invisible hand.”

Businesses are guided by an “invisible hand” to not only seek