Answers to the Review Quiz zes Page 2 1. List some examples of the scarcity that you face. Examples of scarcity common to students include not enough income to afford both tuition and a car, not enough learning capacity to study for both an economics exam and a chemistry exam in one night, and not enough time to allow for extensive studying and extensive socializing. 2. Find examples of scarcity in today’s headlines. Scarcity is our inability to satisfy all our wants. An example of scarcity is the headline on cbc.ca on September 14, 2017, which states “Ontario won’t offer subsidies to lure Amazon.” Amazon is searching for a second North American headquarters. With a subsidy from the Ontario government, Ontario faces scarcity because it has less money to satisfy other wants. Without the subsidy, Amazon may locate elsewhere, depriving Ontario of thousands of jobs and potential billions of dollars in investment. 3. Find an example of the distinction between microeconomics and macroeconomics in today’s headlines. Microeconomics: On September 13, 2017, a headline in The Globe and Mail was “A New Problem: How to sell a $1,300 iPhone.” This story covers a microeconomic topic because it discusses choices made by Apple to make certain features available on the iPhone. It also discusses choices by individuals to buy an iPhone 7, keep an existing iPhone, or buy a smartphone produced by another firm. Macroeconomics: On September 2, 2017, a headline in The Globe and Mail was “Hot economy briefly boosts the loonie past 81-cent mark.” This story covers a macroeconomic topic because it concerns the effect of the Canadian and world economy on the Canadian dollar. Page 7 1. Describe the broad facts about what, how, and for whom goods and services are produced. What we produce varies over time. In Canada today, services account for 70 percent of production, manufactured goods for 28 percent, and agriculture for 2 percent. What we produce also varies over countries. Agriculture and manufacturing are small percentages of production in rich countries and large percentages of production in poorer countries. How goods and services are produced is by businesses determining how the factors of production, land, labour, capital, and entrepreneurship, are combined to make the goods and services we consume. Land includes all natural resources, both renewable natural resources such as wood, and nonrenewable natural resources such as natural gas. The quality of labour depends on human capital. In Canada in 2016, 25.3 percent of the adult population had a