Essay About Economics

A Reflection on the Study of Economics
Part 1
Some of the most compelling topics that I learned in this topic only came into focus at the end of
the course. Economics is a very large and complex study and reflecting on this subject, piece by
piece, requires some patience and ability to put the pieces together. The relationships between simple
choices, such as supply and demand, drives all economic and commercial exchange but only through
the lens of economic models that attempt to layout this system by combing mathematical principles
and psycho–social evaluation. All in all, this was very interesting introduction to some of the
complex drivers that propel society.
Discussions are always useful because we are allowed an opportunity to weigh and evaluate our
own personal thoughts with those of others. This comparison helps gauge where I stand on many
political and social issues that derive from economic theories and philosophies. Knowing where I
stand amongst my peers is a helpful measurement to contrast and qualify my own thoughts. For
example, when the topic of monetary policy came up, I was very shocked to find out the
importance of currency and how it is used in global markets.
What was more revealing is the United States' relationship to the Federal Reserve and that
organization's power of the monetary policy set in this country. It is very difficult to fathom how the
entire economic systems sometimes works without a major disaster every day. The ability of the
economic markets in the world to bring
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Essay on Economics in My Life
Economics in My Life
When I was first given this assignment I was extremely perplexed at how I would even begin to
finish it. I had no idea how economics related to my life in anyway. I hadn't thought about it
critically and I struggling terribly. Thanks to some much needed help from a fellow classmate, he
allowed me to get an idea of things from his own essay. After reading not one, but two other
essays, I was so surprised at how oblivious I had been. I never realized that just about everything
that goes on in my daily life is, in fact, economics. I never realized that from the things I buy to the
money I earn from working is all economics. The things I miss out of while working or going to
school is a complete opportunity cost. Or even...show more content...
Certain books that were unbelievably hard to find were in the higher price range because they were,
in a way, rare. As appose to a book that was so common could easily be found at a cheap price.
They say that there is always something lost at the cost of another. Opportunity cost is something
that I always consider before most decisions. For example, I work weekends as a server, including
Fridays. That Friday shift is one of the best days to work to make good money, but almost every
winter and summer class is Monday through Friday. It's also a full eight hour shift so it makes it
extremely difficult to find even later classes. In my whole two years at ECC I've only been in one
sit–in winter class. Other than that I'm left with online classes. The opportunity cost for the much
need money I make on Friday sets me back enormously in school, because not every class is
available online. Work stands in the way of a lot things in my life. Because I go to school
Monday through Thursday I really only have Friday through Sunday to work. It's hard for me to
go on vacations or even hang out with friends at the beach during summer because I get off later
in the afternoon. Staying out late with friends is also an opportunity cost because I work early
mornings. So you can see that I give up a lot for work but I know that if I work hard now it won't be
so hard later in life. That's when I'll stay out late and go on vacations.
This was first year that I actually had to fill taxes and I

Why I Want to Study Economics
My father always encouraged me to read books and magazines as a way to nurture my curious
mind. The eagerness to explore new concepts and ideas eventually led me to read magazines like the
Economist. As a young reader, I never made an attempt to fully understand words like poverty,
economic development, and inflation. I thought these were just jargons that adults used in order to
provide depth to their articles. However, when I took A–level Economics in my junior year of high
school, my perception towards these words changed. Economics was not some decorative dictation;
rather it helped me understand the economic, political and social changes that were taking place.
Nevertheless, the reason that got me really intrigued to the field of Economics and inspired to
continue learning it in future was the infusion of mathematics with theories to analyze the
real–world situation.
With the aim of being a successful Economist, I focused on equipping myself with various
theoretical courses in Economics along with Econometrics during my undergraduate studies at Smith
College. Simultaneously, I also devoted my time towards taking rigorous classes in Mathematics and
Statistics. As I realized the importance of quantitative techniques in economic research, I enrolled in
the prestigious and challenging General Course program at the London School of Economics (LSE)
where I focused on taking advanced Econometrics and Mathematical Statistics. Therefore, through
the courses I took during my

Essay about Economic Conditions
To analyze an economy, certain statistics can be used to predict the economy's future. This is
important because it helps prepare people for prosperity or hard times. Certain indicators can be
used to determine the future of aggregate demand and others can be used to determine aggregate
supply. Using eight aggregate demand indicators and four aggregate supply indicators we developed
a prediction for the economy in the near future.
Changes in aggregate demand are reflected in changes of GDP. To find valuable indicators of the
future aggregate demand is to find statistics that tell about change in the components of GDP
(C+I+G+Nx). Aggregate supply is influenced by the costs of production to producers and the advent
of new or better factors...show more content...
In general, they are a good indicator of the economy and public sentiment for it. If people are
confident in an economy, they will invest more in stocks, but if they are wary of an economies
future, they are more likely to save their money. Stock prices have been falling after a year of
record gains, indicating that the period of economic growth is either slowing or coming to an
end. The Industrial Production Index is a good indicator of the I in GDP. This index will reflect
growth for producers, whether they are making profits, and if new jobs are being created. After
several years of steady increase, Industrial Production is down, hinting that aggregate demand
may soon be too. Unemployment is another indicator of aggregate demand. If unemployment is
low, many people have jobs, and they will probably be spending, adding to GDP. Unemployment
has been at a record low, but recent layoffs in the auto industry as well as other have driven that
number up to 4.2 from 4.0. This is still a low figure, but if it continues to rise, that may impact
GDP greatly. Disposable personal income reflects how much money people have to spend.
Obviously, the more money someone has the more likely that person is to spend it. After many
quarters of positive figures for real disposable personal income, those numbers have been dropping,
even registering as negative in the last few months. Less income will mean less spending, a lower
GDP, and a

Statement of Purpose for Economics
Coming from the general business background, I find economics the most influential and powerful
social science in society's daily life. Good knowledge of economics leads to better decision–making
and choices, understanding how people and countries interact with each other and can significantly
improve the quality of life for individuals and in the larger scale to countries.
I want to study economics and build a solid knowledge in the field to be able to see the causes of
things more clearly, understand and find out the ways to make good economic decisions, and build
a career through which I can make good contribution to the field by using the acquired academic
skills correctly.
My independent research in the field started with my curious interest in the processes of how
decisions made by individuals and governments, what are the main factors encouraged them to
choose particular decision over other options and the outcomes of those decisions. Then, I started to
read theories of great Economists, such as, Keynes, Freidman , Devenport, Kinnerly and Mason who
wrote on decision–making and the ability of individual to interpret the information. Additionally,
there were theories by De Bondt , Clark , Tversky and Kehnman who argued that human psychology
is interconnected with economics which cannot be ignored. Learning those theories and comparing
them with the real life happenings, my enthusiasm to get deeper insights of economics increased.
Encouraged by this, I have compiled

"I will be honest, there are some kids, I take them into the (kitchen) lab, and they can't even
measure...we are talking basic, basic skills. I think that has a lot to do with the family structure,
how the family has changed" (Wischmeyer). Home Economics was a mandatory and popular class
in the 1980's and 1990's. This class taught more than how to frost a cake, it taught basic and
detailed skills such as sewing a button, measuring and sanitizing skills. In this class learning to
manage a budget and preparing a meal were strong components as well as learning to use basic
tools. Some saw it as a Woman's' class, but it had important skills that all people must know. As
years pass, more schools are dropping the Home Economics programs, but they...show more
content...
Many of the basic skills that women and some men of past generations had are almost extinct.
These skills are simple, and are things that all people should know, and be able to do. These skills
were taught in Home Economics classes, in the past decades, and now it is rare for teenagers to
possess these skills, because they have not learned them. "I think it is unfortunate that home
economics has disappeared from the school curriculum. Learning practical life skills helps students
understand the importance of self–sufficiency. They are more likely to become independent young
adults, able to fend for themselves instead of relying on their parents" (Colombo). Having a class
that will teach you all of these skills and making the class mandatory, will help to learn basic skills
that will help you not only at home, but after high school. Being self–sufficient means to be able to
help yourself without others, and be independent. I believe that with this class the skills you will
be taught could help you in everyday life, from cutting a vegetable to sewing a button. These are
basic skills, and are needed to do everyday activities and repairs. However, these skills may help
students with particular situations in the future, at least one of these skills will be necessary in most
careers for their future.
In Home Economics classes basic skills and more in depth skills will be taught to help with job
searching, and experience. "Real problem solving, the

Economics As A Social Science
Australian economist Steve Keen has said that, "economics is too important to leave to the
economists". I believe that this means that we all must learn how the economy works and
operates, because no matter what you think, economics will always play a large role in your life,
regardless of where you live or how old you are, it will without a doubt impact your everyday life.
Economics can change the lifestyle that you live, from food you eat, to how big of a house you
have, and even the car that you drive. We all must learn what economics is and how to use it to
our advantage, to give ourselves a better life. Economics can be defined as a social science that
studies the allocation of scarce resources used to produce goods and services that satisfy
consumer wants and needs. It is a social science because economics uses the scientific method,
which is a structured way of investigating and explaining, to discover how it plays a role in our
society. Economics has a formula, for which resources are divided up and allocated, and the
decisions that are made to determine where things are allocated play a significant role. Going along
with this, we have a very limited number of resources for consumers that have unlimited wants and
needs, (scarcity) so the allocation process and figuring out which decisions are the most successful
is extremely important. The market is the central hub where buyers and sellers are able to interact
over trade, and economics revolves around the market.

Economic Systems Essay
Introduction
Economic systems are organized way in which a state or nation allocates its resources and
apportions goods and services in the national community. An economic system is slackly defined as
country's plan for its services, goods produced, and the exact way in which its economic plan is
carried out. There are three types of economic systems exist, they are command economy, market
economy, and mixed economy. Command economy is also sometimes calledplanned economy. The
expectations of this type of economy is that all major decisions that related to the construction or
production, distribution, commodity and service prices are all made by the government. However,
in market economy, national and state governments play a...show more content...
Businesses can decide which goods to produce and in what quantity and consumers can decide
what they want to purchase and at what price. The role of the state is limited to ensure right
precision in the prices charged by the sellers. Prices also have the function to allocate and
distribute a country's resources. Market leads to complete effectiveness bringing about the best
possible distribution of a country's resources in a perfect world. This would only happen in a
state of equilibrium and there is a unique price for every commodity. But in a realistic world
which is imperfect by nature, prices are never at equilibrium and very unstable depending upon
the vagaries of the market forces. This generally harms people living below the poverty line. It is
impossible for them to pay high prices in cases of demand shortage. Thus, the free market model
is not a viable option in developing countries which has a large number of poor. Besides, producers
are aim to minimize profit and maximize rent of production. Examples of countries that are using
this economy system are Hong Kong, USA, and UK. Many developing countries like India and
China are moving towards totally free–market economy. The command economy is government
directed. The market forces have very little say in such an economy. There is no private property.
On the other hand, a command economy aims at using all available resources for developing either

Economics of Daily Life Essay
Economics of Daily Life
Leah Hand
Stevens–Henager College
Economics of Daily Life
Economics is a study of how society manages its scarce resources. The literal translation for
economy is "one who manages a household." "In an increasingly complex world connected by social
and economic interaction and interdependence, news of stock market fluctuations, consumer
confidence scores, and various economic indicators fill the media" (Broome & Preston–Grimes,
2011). This means that economics is everywhere, even in a home. Every household makes decisions
that follow the economic principles. There are tradeoffs, and incentives. Supply and demand
regularly show up in a household setting, as do decisions regarding limits on price and time. I...show
more content...
There is also the trade–off of being with friends or keeping my house clean. I could probably list a
few hundred tradeoffs that occur during my day. Another principle of economics is incentive.
Incentives are a form of motivation for a person to do something; a simple example of incentives
is being paid working wages. The Montessori school children in the study had an incentive for their
school to do well; the profit would be funds for a school trip at the end of the year. The better their
school store did the more money they had at the end of the year (Broome & Preston–Grimes,
2011). Incentives are one of the principles that show up in my daily life regularly. With four
children in one house, the concept of incentives is crucial. There are chores to be done daily, and
the incentive of money as a reward is one of the incentives I use.
In my job, I also receive the incentive of money for working. Incentives also show up while
driving; not getting a speeding ticket is the incentive for driving the speed limit. Tradeoffs and
incentives are only two of the ten principles that I come across in my life at home.
Not only am I a mom but I am a manager of a floral shop in a town close to me. Supply and demand
are so very apparent in my field, and it is a very fluid thing. The supply that I handle daily is
obviously the flowers. Our flowers come from various places from all over the world. Supply is
based on

Economic Growth Essay
Economic Growth Economic growth refers to the rate of increase in the total production of goods
and services within an economy. Economic growth increases the productivity capacity of an
economy, thereby allowing more wants to be satisfied. A growing economy increases employment
opportunities, stimulates business enterprise and innovation. A sustained economic growth is
fundamental to any nation wishing to raise its standard of living and provide a greater well being
for all. Gross domestic product (GDP) is the monetary value of all final goods and services produced
over a year. It is the total value of production within the economy. The total value of production is
the total value of the final goods or services less the cost of...show more content...
Real GDP is measured by the following formula; [(current year quantity) x (based year price)]. A
more reliable measure of economic growth is real GDP per capita; this measurement takes into
account both the total production of the nation and the total population. Real GDP per capita
measures the real income per head of the population.
This can be measured by the following formula; Per capita nominal GDP = Nominal GDP
/ Population, Per capita real GDP = Real GDP / Population. Seven factors determine economic
growth. Natural resources such as land, mineral deposits, waterways; climatic conditions provide an
essential foundation to economic growth. Combined with the other resources of capital, labor and
enterprises, natural resources can be developed and organized to increase the productive capacity if
the nation. Consequently the quality and size of the labor force is a major determinant of economic
growth. Education and vocational training are essential the growth potential of a nation. The
promotion of education and job training schemes increase the knowledge, skills and flexibility of the
workforce that contributes to potentially higher levels of productivity and efficiency. Whether from
natural increase or immigration population growth can cause a higher level of economic growth. An
increasing population requires increased public spending on housing, education and other social
needs while businesses expectations of

Economics Reflection
. Through the process of reading, I learned many things about the economy. First of all, I learned
that it is a much more difficult decision to come to in regards of how much government
involvement in the nation's economy is enough, how much is too little, and how much is not
enough. I also learned that trying to keep the economy stable and productive is a constant and
difficult struggle, and that it is often difficult to even know what needs to or can be done in order to
stabilize it. While I find economics to be somewhat boring (I am a music major and largely
emotionally driven, which means that my entertainment is usually emotionally involving somehow),
I actually enjoyed how Wheelan explained economics in this book. While I would not read it for
fun, reading this book as an assignment was not painful.
Having government involved in the economy has its pros and cons. One of the Pros is that the
government can help prevent or discourage harmful behaviors or actions. Government regulation can
prevent man–caused shortages. Fishing regulations are often put in place to prevent overfishing.
These regulations prevent or discourage fishermen from fishing too much in one season, which
allows the fish to repopulate and remain available in the future. In the book, Wheelan mentioned
how the government can also tax bad behaviors to encourage behaviors that benefit health and/or the
environment. An example of this is a tax on gasoline and/or larger vehicles, or a tax on cigarettes.

Essay on Economics
Ep = – 0.36, P = 4
–0.36 = 4/(4–a)
–0.36 (4–a) = 4
0.36a = 5.4 a = 5.4/0.36 = 15
Consider the following production functions: ? Y = 10K1/2L1/2 ? Y = 2K + 3L a. Fixing labor
employment (L) at 16 units, what is the marginal product of capital when capital employment is 25,
35, and 45 for each production function? Do these production functions exhibit diminishing returns
to capital employment? Explain. b. Are labor and capital complements under these production
functions? Explain. c. Do these production functions have the property of constant returns to scale?
Explain. d. Is either production function a "Cobb–Douglas" function? Explain.
п‚· n economics, the Cobb–Douglas functional form of production functions is widely used to
represent...show more content...
There is now doubt over whether constancy over time exists.
History
Paul Douglas explained that his first formulation of the Cobb–Douglas production function was
developed in 1927; when seeking a functional form to relate estimates he had calculated for workers
and capital, he spoke with mathematician and colleague Charles Cobb, who suggested a function of
the form Y = bL^kC^{1–k}, previously used by Knut Wicksell. Estimating this using least squares,
he obtained a result for the marginal productivity of capital k to 0.75–which was subsequently
confirmed by the National Bureau of Economic Research to be 0.741. Later work in the 1940s
prompted them to allow for the exponents on C and L to vary, resulting in estimates that
subsequently proved to be very close to improved measure of productivity developed at that time.[1]
A major criticism at the time was that estimates of the production function, although seemingly
accurate, were based on such sparse data that it was hard to give them much credibility. Douglas
remarked "I must admit I was discouraged by this criticism and thought of giving up the effort, but
there was something which told me I should hold on."[1] The breakthrough came in using US census
data, which was cross–sectional and

Macroeconomics Essay
"Macroeconomics is a branch of economics that deals with the performance, structure, and behavior
of a national economy as a whole. Macroeconomists seek to understand the determinants of
aggregate trends in an economy with particular focus on national income, unemployment, inflation,
investment, and international trade" (Wikipedia, 2007). Government tends to use a combination of
both monetary and fiscal options when setting policies that deal with the Macroeconomic.
According to McConnell & Brue (2004), governments make adjustments through policy changes
which they...show more content...
dollars into gold at $35 per ounce, has made the U.S. and other countries' monies into fiat
money–money that national monetary authorities have the power to issue without legal constraints.
Money is used in all economic operations; money has a powerful effect every economic activity. The
increase in supply of money put more money in the hands of the consumers and increased spending.
When the money supply continues to expand and the prices begin to increase, particularly if the
output growth reach to the capacity limits as the public begin to expect the inflation, lenders insist on
higher interest rates to offset and expected decline in purchasing power over the life of their loans.
Contradictory results happen when the supply of money falls, or when the rate of growth cries off.
The U.S. money supply comprises currency–dollar bills and coins issued by the Federal Reserve
System and the Treasury–and various kinds of deposits held by the public at commercial banks and
other depository institutions such as savings and loans and credit unions. On June 30, 1990, the
money supply, measured as the sum of currency and checking account deposits, totaled $809 billion.
Including some types of savings deposits, the money supply totaled $3,272 billion. And even broader
measure totaled $4,066 billion

Essay about U.S. Economy
The United States economy is currently not looking very good. Over the past couple of months
the economy has taken a turn for the worst and we could be headed into a recession in the coming
months or years. The biggest problems are in the real estate and mortgage markets. In 1999,
housing prices rose at huge rates and lenders began offering riskier mortgages, which caused
homeowners to keep piling up huge debts. People were taking out loans and balloon mortgage
payments that they really could not afford. The problem began in late 2007, when housing prices
began to fall and the system fell apart causing huge numbers of defaults on home loans and
foreclosures. Currently, 5.6% of mortgages are delinquent, the highest rate in 21 years, and...show
more content...
The housing crisis that I mentioned earlier and resulting backlash through the entire economy has
been building for awhile now but it has just came into the forefront in the past couple of weeks.
We really haven't faced a downturn like this since the Depression. Last Tuesday, January 22, the
Dow Jones industrial average fell almost 600 points and was already down 9% in 2008 (Gross 1).
Immediately the Federal Reserve took action and cut the interest rates three–quarters of a percentage
point, the biggest cut in 24 years. Today, not even a week later, the Fed again cut interest rates, this
time by a half–point (Aversa 1). This move is an effort to keep the economy out of a recession by
getting money back into the banks and encouraging them to keep lending credit to turn the
economy upward. Whether or not it will work remains to be seen in the coming months. The
government also announced another move to a couple weeks ago to help get the economy going
again and avoid or slow down a recession. President Bush and the House are currently developing a
$145 billion stimulus plan that would give tax relief to citizens by sending them individual checks
for $300 and up. The plan would put over $100 billion into the hands of consumers and the
government hopes that money would be spent and put back into the economy (Wolf 1). While all
these things are good news for the struggling economy, most economic experts believe that a
recession of some kind may be impossible to avoid

Essay about Managerial Economics
Ch2
Student:
___________________________________________________________________________
1.
In a competitive market, the market demand is Qd = 60 – 6P and the market supply is Qs = 4P. A
price ceiling of $3 will result in a A. B. C. D. shortage of 30 units. shortage of 15 units. surplus of
30 units. surplus of 12 units.
2.
In a competitive market, the market demand is Qd = 60 – 6P and the market supply is Qs = 4P. The
full economic price under a price ceiling of $3 is A. B. C. D. 6. 7. 8. 9.
3.
The buyer side of the market is known as the: A. B. C. D. income side. demand side. supply side.
seller side.
4.
The law of demand states that, holding all else constant: A. B. C. D. as price falls, demand will fall
also. as...show more content...
20. Suppose the demand for good X is given by Qdx = 10 – 2Px + Py + M. The price of good X is
$1, the price of good Y is $10, and income is $100. Given these prices and income, how much of
good X will be purchased? A. B. C. D. 115. 515. 1,000. none of the statements associated with this
question are correct.
21. Other things held constant, the greater the price of a good A. B. C. D. the lower the demand. the
higher the demand. the greater the consumer surplus. the lower the consumer surplus.
22. The curve which summarizes the total quantity producers are willing and able to produce at
differing prices is the: A. B. C. D. market demand curve. consumer surplus curve. average cost curve.
market supply curve.
23. The law of supply states that, holding all else constant, as the price of a good falls: A. B. C. D.
quantity demanded rises. quantity supplied falls. quantity supplied rises. quantity demanded falls.
24. The economic principle that producers are willing to produce more output when price is high is

depicted by the: A. B. C. D. upward slope of the supply curve. extreme steepness of the supply
curve. downward slope of the supply curve. interaction of the supply and demand curves.
25. For a steel factory, a decrease in the cost of electricity to the plant will cause the supply curve
to: A. B. C. D. become flatter. shift to the left. shift to the right. become parallel to the price axis.
26. Changes in the price of a good lead to: A. B. C. D.

business economics Essay
Table of Contents 1.INTRODUCTION 2.MAIN BODY 2.1THE NATURE OF RESOURCE COST
STRUCTURE AND THE PRACTICAL SIGNIFICANCE OF DIFFERENT COSTS 2.2THE
FACTORS INFLUENCING OPTIMUM SIZE AND THE SIGNIFICANCE OF DEMAND AND
SUPPLY RELATIONSHIPS 2.3UNDERSTANDING OF THE RELEVANCE AND
LIMITATIONS OF ECONOMIC THEORY TO MANAGE DECISIONS 3.CONCLUSION
1.INTRODUCTION: From the economic perspective, there are a full range of wants from
individuals, firms and government but there is only a few number of resources or factors of
production such as land, labour, capital and enterprise. The raw material will come from land,
taking the example of oil, gas. The labour relates to the individuals able to work. The capital covers
machinery,...show more content...
Equipment, everything used to bring all the materials together, for example, cranes, welding sets,
computing time, mobile offices. It is also important to know how much money committed to spend
at any point in time. 2.1.1The microeconomics perspectives: This focuses on the market behaviour
of individual consumers and firms to help understand the decision making process of firms and
households. This is at a level of individual buyer and individual seller, meaning demand and
supply. How much to produce and how much to charge for it. The law of the demand is that the
demand decreases when the price increases and the demand increases when the price decreases.
Also more demand of a product results in an increase of the price the price of that product. (See
graph below). 2.1.2The macroeconomics perspectives, focuses on the big picture of the national
economy as a whole and provides a basic understanding of how things work in the business
environment. The macrocosmic policy goals will be achieved by the monetary policy and the fiscal
policy. The monetary policy is the management of the nation money supply, the decision of the
interest rate and the banking system to promote economic growth, lower unemployment and
inflation. 2.2The factors influencing optimum size and the significance of demand and supply
relationship: The demand and the supply are two main concepts of the economy. Demand is what
quantity of product or service

What is Economics? Essay
Many people think that economics is about money. Well, to some extent this is true. Economics has
a lot to do with money: with how much money people are paid; how much they spend: what it costs
to buy various items; how much money firms earn; how much money there is in total in the
economy. But despite the large number of areas in which our lives are concerned with money,
economics is more than just the study of money.
It is concerned with:
В·The production of goods and services: how much the economy produces; what particular
combination of goods and services; how much each firm produces; what techniques of production
they use; how many people they employ.
В·The consumption of goods and services: how much the population as a...show more content...
There are three types of resources:
В·Human resources: labour The labour force is limited both in number and in skills.
В·Natural resources: land and raw materials The world's land area is limited, as are its raw materials.
В·Manufactures resources: capital
All inputs into production that have themselves been produced: e.g. factories, machines and tools.
One must bear in mind that our wants are virtually unlimited, while the resources available to
satisfy these wants are limited. In other words when society demands more of a product than can
actually be produced to fulfil those wants we have a problem of scarcity. An example of this would
be the OPEC oil price shocks between 1973 and 1980. Yes, it is true that the price of oil rose and
some individuals used substitutes but the economies of oil importing countries like Germany and
Japan fell because OPEC now had more buying power since they had the control over a scarce
resource. We can therefore think of oil as having become scarcer in economic terms when its price
rose.
Earlier I stated that economics is concerned with consumption and production. We can look at it in
the terms of demand and supply. It is simply the quantity of a good buyers wish to purchase at each
conceivable price. Three factors determine demand:
В·Desire
В·Willingness to pay

В·Ability to pay
Whilst supply is the quantity of good sellers wish to sell at each conceivable price. Supply is

Essay about Economics Question and Answers
Chapter 1: The Power of Markets
What are the two basic assumptions that economists make about individuals and firms?
Economists have two basic assumptions which keeps the economy in check. One is that people try
to make themselves as versatile as possible maximizing their overall potential. The other is that a
firm would do what it needs to make the most profit possible.
What is the role and significance of prices in the market economy? Prices in a market economy are
very important. Price allows us to give out goods appropriately to those who are able to pay.
What's so great about a market economy anyway?
Market economies are great for many reasons. A market economy makes our lives better through
competition either through lowering...show more content...
Chapter 4: Government and the Economy II
What are the main reasons why government should take only a limited role in a market economy?
There are many reasons why government should have a light touch in market economies. Some
government programs may be to costly and in the end backfire if not planned through thoroughly or
may of even been thought up by corrupt politicians. The government also makes the struggle as a
poor family harder to bare as taxes are more often then not, in the government, in favor of keeping
the money where it is.
Chapter 5: Economics of Information
Basic economic models assume that all parties have "perfect information." How does "informational
asymmetry" undermine our market economy?
Information asymmetry is great for some and awful for others. It also leads to rational and irrational
discrimination. For example, it could lead to hiring a male over female, a Caucasian over African
American, and other discriminatory decisions, in these cases are understandable.(Women have
maternity leave; African Americans are 28% more likely to of gone to jail.)
Chapter 6: Productivity and Human Capital
After reading Whelan's argument, do you agree that Bill Gates should be so much richer than you?
Why?
Not Mentioned.
Evaluate the following statement from pg. 113: "We should not care about the gap between the rich
and the poor as long as everyone is living better."
I believe this statement has one solid

Essay on Principles of Economics
Principles of Economics Paper
Individual decision making is either you do, or you do not. Most people are rational beings basing
their decisions on a formula, benefits versus cost. Are the benefits of buying a $1000 television
worth it? Are the marginal benefits worth the marginal cost?
Just this morning, I was faced with such a scenario. I was invited over to a friend's house to try a
new video game. I did not go, however, because I knew that I had to read several chapters for my
class and write a paper. The benefits were that I would have some time to hang out with my friends
and enjoy some much needed free time. The cost would've been that I could have not gotten all of
my reading done and possibly been late on my...show more content...
Centrally planned economies are of a lower caliber quality, because the government decides who,
what, and how products will be handled. This however does not meet the consumers wants, only the
needs.
Market economies are quite different from centrally planned. Market economies base their who,
what, and how answers on the consumers. This gives the consumers more choice and power on their
buying habits. In a market economy, products will tend to have higher quality and higher probability
of satisfying the consumers. This does, however, target the more willing and capable buyers.
There is a third economic system that was brought about in the nineteenth century: a mixed
economy. This mixed economy is a combination of both centrally planned and market economies.
This allows for the answers to "who, what, and how?" to be decided by consumers but in which the
government has a significant role in the allocation of resources.
Simply explained, social interactions change from one economic system to another. A centrally
planned economy restricts free will as far as the questions who, what, and how. Perhaps leaving the
society a little less satiated. A market economy will allow for higher paying jobs, better quality
products, but targets only a certain demographic. A mixed economy attempts to combine both
systems and allow for high quality products, high paying jobs

Economics Elasticity Essay
Businesses know that they face demand curves, but rarely do they know what these curves look
like. Yet sometimes a business needs to have a good idea of what part of a demand curve looks like
if it is to make good decisions. If Rick's Pizza raises its prices by ten percent, what will happen to
its revenues? The answer depends on how consumers will respond. Will they cut back purchases a
little or a lot? This question of how responsive consumers are to price changes involves the
economic concept of elasticity.
Elasticity is a measure of responsiveness. Two words are important here. The word "measure" means
that elasticity results are reported as numbers, or elasticity coefficients. The word "responsiveness"
means that there is...show more content...
When it is greater than one, economists say that demand is elastic.
Products which have few good substitutes generally have a lower elasticity of demand than products
with many substitutes. As a result, more broadly–defined products have a lower elasticity than
narrowly defined products. The price elasticity of demand for meat will be lower than the price
elasticity of pork, and the price elasticity for soft drinks will be less elastic than the price elasticity
for colas, which in turn will be less elastic than the price elasticity for
Pepsi.
Time plays an important role in determining both consumer and producer responsiveness for many
items. The longer people have to make adjustments, the more adjustments they will make. When
the price of gasoline rose rapidly in the late 1970s as a result of the OPEC cartel, the only
adjustment consumers could initially make was to drive less. With time they could also move
closer to work or find jobs closer to home, and switch to more fuel–efficient cars.
The concept of elasticity can help explain some situations that at first glance may seem puzzling.
If American farmers all have excellent harvests, they may have a very poor year financially. They
may be better off if they all have mediocre harvests. If a bus company decides it needs more
revenue and tries to get it by raising fares, its revenues may decrease rather than increase.
Inelastic Demand

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