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Scarcity and Fundamental Economic Questions

How does the 3 Scarcity and the Fundamental Economic Questions apply to the franchise dunkin donuts?

What should be produced? Using the economyâ??s scarce resources to produce one thing requires giving up another. Producing better education, for example, may require cutting back on other services, such as health care. A decision to preserve a wilderness area requires giving up other uses of the land. Every society must decide what it will produce with its scarce resources.

How should goods and services be produced? There are all sorts of choices to be made in determining how goods and services should be produced. Should a firm employ a few skilled or a lot of unskilled workers? Should it produce in its own country or should it use foreign plants? Should manufacturing firms use new or recycled raw materials to make their products?

For whom should goods and services be produced? If a good or service is produced, a decision must be made about who will get it. A decision to have one person or group receive a good or service usually means it will not be available to someone else. For example, representatives of the poorest nations on earth often complain that energy consumption per person in the United States is 17 times greater than energy consumption per person in the worldâ??s 62 poorest countries. Critics argue that the worldâ??s energy should be more evenly allocated. Should it? That is a â??for whomâ? question.

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For Dunkin Donuts' franchise, the decision regarding the best product mix to produce will depend on the demand for the different products in that area. For example, if the consumers are ordering more donuts than coffee, they should produce more of donuts and less of coffee and other products. The available resources should be used for the production of those products that results in maximum profit for the ...

Solution Summary

How does the 3 Scarcity and the Fundamental Economic Questions apply to the franchise dunkin donuts?

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