Economics - 12898 Words

ECONOMICS CHAPTER 1 ECONOMIC WAY OF THINKING SCARE RESOURCES WEALTH OF THE NATIONS ECONOMICS: ADAM SMITH STAR CITY Scarcity Scarcity is the basic and central economic problem confronting every society. It is the heart of the study of economics and the reason behind its establishment. Authors have defined scarcity in various way some if which are complexly stated. One author defines scarcity as a commodity or service being in short supply, relatives to its demand (Kapur 1997) which implies a constant availability of commodity or economic resource relatives to the demand for them. In quantitative terms, scarcity is sad to exist when at a zero price there is a unit of demand, which exceeds the available supply†¦show more content†¦It is widely used in economics as an exploratory technique as it allows economist to isolate the relationship of two variables. For instance, with the question: what s the impact of a change in the price of rice on consumption behavior, ceteris paribus (or other things remaining constant)? If the price of rice increased by 20 percent, how much consumption will there be, assuming no simultaneous change in other variables that is, assuming that income, number of family members, population, laws and so on all remain constant. Brief History: The Classical, Keynesian and Modern Economics This brief historical introduction aims to give a background on most profound names in the study of economics and their important contributions in this field of study. Birth of Economics Theory: Classical Economics Economic theory saw its birth during the mid 1700s and 1800s. During this era, two important economists emerged. First is Adam Smith of Scotland. He is considered the most important personality in the history of economics being regarded as the â€Å"Father of Economics†. He was responsible for the recognition of economics as a separate body of knowledge. His book, â€Å"Wealth of the Nations†, published in 1776, became known as â€Å"the bible in economics† for a hundred years (Fajardo 1977). One of his major contributions was his analysis of the relationship between consumer and producers through demand and supply, which ultimatelyShow MoreRelatedEconomics And Economics On Economics Essay1142 Words   |  5 PagesWhen we talk about economics we must first defined the word. Economics is a social science that studies human behavior and how to allocate our limited (scares) resources, efficiently and effectively to meet our unlimited human wants. Now as we dive dee per in to the field of economics we realized that there are two separate categories that the study of economics breaks off into. The first is macroeconomics, macroeconomics is the study of the whole picture when it comes to economics. Macroeconomics willRead MoreEconomics : Economics And Micro Economics1238 Words   |  5 Pages Economics is the study of how our unlimited demand of certain things can be met by our limited amount of supply. For instance, if there was an unlimited amount of money for everyone, then everyone would have everything they had always wanted and would not have to work to get the money. Everyone would have billion dollar homes and the nicest cars in the world. Unfortunately, we do have a limited amount of money, so the economists find ways to get around that. There are two types of economicsRead MoreEconomics : Economics Of Business1361 Words   |  6 PagesHND Accounting Economics FINAL REPORT: The Economics of Business DUE DATE: 20 May 2015 Catherine Macintosh 11006620 For the attention of Sarah Sutherland Word count: 1,243 (Excluding Acknowledgements, Abstract/Executive Summary, Terms of Reference, References Appendices TABLE OF CONTENTS Page 1.0 Costs 3 1.1 Total costs 3 1.2 Average costs Read MoreEconomics1291 Words   |  6 Pageshis profit. Do you agree? Use a graph to illustrate your answer. The argument is incorrect. As the graph shows, a reduction in marginal cost will cause a monopolist to reduce his price. 2. Economist Harvey Leibenstein argued that the loss of economic efficiency in industries that are not perfectly competitive has been understated. He argued that when competition is weak, firms are under less pressure to adopt the best techniques or to hold down their costs. He referred to this effect as x-inefficiencyRead MoreEconomics1444 Words   |  6 Pagesresource is inefficient it means the resources are not used in the best distribution by firms or organizations. An ETS is executed when the environment has been polluted and the government intervenes in order to control the pollution by providing economic encouragements towards the firms and organizations to reduce the amount of pollution emitted in the environment (Brown* 2001). When ETS is implemented it reduces the pollution of the environment caused by different firms thus making it its main goalRead MoreEconomics1654 Words   |  7 Pagesï » ¿1. What is the ‘economic problem’? The fundamental economic problem is related to the issue of scarcity. Scarcity means that resources are limited and short in supply in the world (e.g. diamond). Because of limited resources and unlimited demands, society needs to decide how much to produce and distribute these relatively scarce resources. The basic economic problem can be define as what to produce, how much to produce and for whom to produce. Some countries are lucky to have great naturalRead MoreEconomics999 Words   |  4 PagesManagerial Economics MIDTERM Exam What changes can you envision to the real economy, should Rifkin’s vision of a zero marginal cost society, become reality? For me, Jeremy Rifkin is a great social theorist. I’m mostly agreeing with him, with his conclusions and visions of the future economy. They looks like perfect and definitely it’s a â€Å"think big† way of delivering the information. His book â€Å"The Zero Marginal Cost Society† is must read, of course. Trigger is a zero marginal cost. I’m completelyRead MoreEconomics1000 Words   |  4 Pagesconsumer change, there will be a much greater change in the production output in the capital equipment required to make those consumer goods. This change in the production of capital equipment, that is , investment spending speeds up the rate of economic growth or slump Since we are focused on short-run business-cycle fluctuations here, it is reasonable to ignore changes in K/Y that may be associated with long-run advances in technology. 15 – 10 proportional to the level of output in t, Kt Read MoreEconomic Growth And Economic Development917 Words   |  4 PagesEconomic growth refers to an increase in the capacity for an economy to produce goods and services as compared from one period of time to another. It can be measured either in nominal terms which include inflation, or in real terms that are adjusted for inflation. It is mainly influenced by unemployment, inflation, technology levels, rate of investment, population growth rate, among other factors. These factors are used further to explain the differences in the varying level of output per capitaRead MoreEconomics1134 Words   |  5 PagesMF 7701 Managerial Economics Quiz #1 Fall 2014 Instructions: 1. You may work on this quiz alone or with as many other students as you wish. If you work with other students, please submit only one (common) answer. 2. You may not talk about this exam with anyone outside of the two managerial economics sections. 3. You may work with people from the other section if they are taking this course. In all cases, please submit only one, common answer. 4. You must e-mail your final