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Economics core concepts
Microeconomic principles/concepts
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What is Microeconomics? This question was left unanswered when I initially enrolled in this course. Microeconomics is the social science that studies the implications of individual human actions, specifically about how those decisions affect the utilization and distribution of scarce resources. Microeconomics shows how and why different goods have different values, how individuals create more efficient or more productive decisions, and how individuals best coordinate and cooperate with one another. Microeconomics does not try to explain what should happen in a market, but instead only explains what to expect if certain conditions change. For instance, If the price of the new iPhone 8 is higher than the previous model will the consumer buy it? There are several elements that will play into getting an answer for this question, but gives you a general idea of what microeconomics entails. The definition of microeconomics was presented a high level, and I was still left drawing a blank trying to discover how this method of social science correlated to my everyday life. Starting from week one Professor Julie Pelia assigned us topics that engaged our minds, and I quickly began to see how the various components of Microeconomics fit into my life. This summary of Microeconomics will cover some of …show more content…
There are two types of economic systems that a society may adhere to; which are polar opposites. The Command system, also known as communism or socialism. In a command economy, the government owns the majority of the resources, and all decisions for the society is made based on a central plan. The command system has been adopted by countries such as the Soviet Union, China and North Korea. This economic system is commonly used by countries under a dictatorship. Despite the negative aura surrounding a dictatorship this system does have its pros and
From classroom to a cocktail party, having knowledge in today’s economics is definitely an asset when it comes surviving in the world of business. Cocktail Party Economics, by Eveline Adomait, and Richard Maranta undeniably satisfies as an economic training book, helping you understand the concepts of basic economics. The book brings to light many theories and thoughts, which are explained in a certain way that help readers easily, compare and relate them to each other. During the first couple chapters of the book, the main theories presented are scarcity, value, opportunity cost, production, and absolute/comparative advantage. Believe it or not, all of these theories are relatable to Supply and Demand; the two concepts introduced in chapters six and seven.
The Island of Mocha in the video is an example of a traditional economic system evolving into a market system. Every person plays a key role in this traditional system. They had fisherman, coconut collector, melon seller, lumberman, barber, doctor, preacher, brownies seller, and a chief. The Mochans got sick of trading goods all across the island just to get the things that they want or needed. The Chief decided that they would use clam shell for currency instead of trading.
Wildlife tourism has become a particularly popular trend over the years. Riding on elephants, taking pictures with lions, swimming with dolphins are only a few of the adventurous and thrilling activities that wildlife tourism provides. Even my own school is planning a trip to South Africa to participate in several of the enthralling ventures.
Macroeconomics studies the economy as a whole, while microeconomics studies the individuals and business decisions regarding the prices and goods and services (Investopedia, 2009). Macroeconomics looks at government and industry standard, rather than individual economic decisions. Microeconomics focuses on supply and demand and forces that affect price in an economy. Monopolies, such as GoodLife in the simulation, are a macroeconomic concept, because they are a top down view of a firm’s control of the economy. A monopoly is a market structure where one seller completely controls the market prices and fears no competition because none exist due to the barriers of entry. Price ceilings and price floors also fall under the macroeconomic scope because they are imposed by governments on whole economies or markets. A price ceiling is legal limit imposed by the government on how high the price of a good can be. Conversely, a price floor is the legal limit imposed by the government on how low the price of a good can be. Supply and demand of individual apartments are a microeconomic concept because it focuses on one product and not an industry. Suppliers are more willing to supply at a higher price, to cover their increased cost.
So we looked at being different and the importance of working through the why we do things the way we do with items and services. If not, we learned, who we are and why we buy, more than what we are and where we buy – something most like to perceive economics to be.
McConnell, Campbell, Flynn Sean, and Brue Stanley.Principles of Microeconomics. Brief Edition. United States of America: The McGraw-Hill Companies, Inc., 2013. 3-163. Print.
There is a long-running debate about whether communism or capitalism is preferable and shows more of beneficial aspects. Capitalism is defined as an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations. While communism is a system of social organization in which all economic and social activity is controlled by the state. The principle of capitalism is if one is successful and hardworking will keep improve and progress in life. While the principle of communism is to keep all the people the same, a lot of people may say that this is a good thing but when talking about real life this would add laziness and demotivation because hardworking people would gain the same credit as lazy people. Capitalism and communism are the two main economic systems that are used by governments nowadays. Obviously capitalism is a much better economic system to be used by a state; practical uses and statistical facts qualify capitalism as much more successful. Also, capitalism is more beneficial to the state, common citizens, and business owners. It would be very useful to test the two systems according to practical uses of the two systems on states and monitor which states succeeded and which states failed.
Capitalism is an economic system in which the production and distribution are privately owned, the government involvement is minimal,and there is free enterprise. In Capitalism, the means of production are privately owned and operated for profit in a competitive market. Also the economic investment, ownership and profits are all owned by individuals. Under capitalism the state is separated from the economy, which means that the government has no role in business. In other words, everyone works for themselves. The market forces in a capitalist country runs by supply and demand which it determines the price and later on it turns into profits. Supply is the quantity of goods and services a business is willing to sell, while Demand is the quantity of goods and services consumers are willing to buy. Therefore, Capitalism is the best economic system because it rewards the ones that work hard and since the government does not control trade, there is a large variety of goods and creates options for consumers to fit their personal needs.
The Economy is the backbone to society. There are many factors that operate in, and govern our society’s economical structure. Factors such as scarcity and choice, opportunity cost, marginal analysis, microeconomics, macroeconomics, factors of production, production possibilities, law of increasing opportunity cost, economic systems, circular flow model, money, and economic costs and profits all contribute to what is known as the economy. These properties as well as a few others, work together to influence the economy. Microeconomics and Macroeconomics are two major components. Both of these are broken down into several different components that dictate societal norms and views.
If one looks at liberty and individual freedom, it is evident that command economies tend to oppress their citizens. Therefore, socialism, which allows for basic needs to be met and personal freedoms to be upheld, is the best economic system for all of a country’s citizens. Market economies, as a whole, inherently and inevitably lead to poverty and a large class disparity. In a capitalist society, the ones who supply labor, the ones who work the hardest, are the ones who are paid the least. The owners, who are already rich, receive most of the profit and accumulate large masses of wealth.
The crucial importance and relevance of economics related disciplines to the modern world have led me to want to pursue the study of these social sciences at a higher level. My study of Economics has shown me the fundamental part it plays in our lives and I would like to approach it with an open mind - interested but not yet fully informed.
It is the role of every government to safeguard its people in all matters including controlling the economy. Every economy faces different challenges including the business cycles that may emanate from the global market. In this paper we try to examine measures taken by the UK’s coalition government in trying to ensure that the economy benefits every citizen and reduces the overall burden to it. We consider the recent comprehensive review on spending.
Capitalism is the only social system that rewards merit, ability and achievement, regardless of one’s birth or station in life. Capitalism is the only social system that rewards virtue and punishes vice. This applies to both the business executive and the carpenter, the lawyer, and the factory worker. Thomson: Capitalism is the world’s dominant economic system. Within it, the means of production and distribution are owned by individuals: private ownership and free enterprise are believed to lead to more efficiency, lower prices, better products and rising prosperity....
In today's world, economics associated disciplines are of fundamental significance and application and this has encouraged me to pursue a degree in Economics. Economics has an important relevance in all of our lives. As consumers we try to make the best of our limited incomes. As workers we take our place in the job market. As citizens of a country our lives are affected by the decisions of our government: decisions over taxes, decisions over spending on health and education, decisions on interest rates, decisions that affect unemployment, inflation and growth. As dwellers on the planet Earth we are affected by the economic decisions of each other: the air we breathe, the water we drink and the environment we leave for future generations are all affected by the economic decisions taken by the human race. It is these stimulating issues that excite me about economics. I enjoy studying Economics enormously and believe my passionate interest in economics is continually strengthened by my regular reading of 'The Economist'
A market economy may therefore also be known as a free market economy. It is a type of economic system in which the trading and exchange of goods, services and information takes place. The phrase is normally applied to countries or management regions that follow this approach. It functions primarily depending upon the forces of the market, namely demand and supply. Every commodity allocates and distributes based on the principle of “price”. Generally, price of a commodity shoots up when its demand exceeds supply and when the reverse occurs.