Start with your factors of production on page 34 and then briefly describe whether these resources were allocated efficiently. Think about how you can check whether marginal benefit equals marginal cost for each of your household’s activities. Are your household’s resources allocated fairly? Think about the two ideas of fairness and how they apply in your household.
You live in the national economy, your state economy, your regional economy, and your own household economy. The many decisions you must make affect efficiency and fairness at all these levels. Think about your household economy. Make a spreadsheet and on it identify all the factors of production that your household owns. Counts all the person-hours available and any capital. Show how these resources are allocated.
By what methods are your households scarce resources allocated? Identify those allocated by the market price; by command; by first-come, first served; and by equal shares. Are any resources allocated by majority vote?
Now the tough part: Are these resources allocated efficiently – is the value of your household’s resources maximized? Think about how you can check whether marginal benefit equals marginal cost for each of your household’s activities.
And now an even tougher question: Are your household’s resources allocated fairly? Think about the two idea’s of fairness and how they apply in your household.