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Problem Set #1 INSTRUCTIONS: 1. (10 points)Why does scarci

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Problem Set #1 INSTRUCTIONS: 1. (10 points)Why does scarcity imply a choice among alternatives? 2. (35 points) Suppose the country of Mexico produces only two goods: pizzas and chicken wings which is shown by the production possibilities table below. Production Possibilities for Pizzas and Chicken wings in Mexico Production Alternatives Pizzas (P) Chicken Wings (W) A 100 0 B 90 120 C 70 200 D 50` 250 E 30 280 F 0 300 3. (10 points)Identify types of economic resources and types of income associated with each of the resources b. Indicate whether the relationship ispositive(direct) ornegative(indirect). Explain why? c. Which variable is thedependentvariable and which is theindependent variable? b. Who are the two groups of decision makers in the private economy (when government is not involved)? c. What are the two markets in the model and what happens in each of the market? d. What are the limitations of the model

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