Unit 1: Competitive markets, How they work and why they fail.
partitioning A What is the nature of economics?
scarcity and prospect cost
References Anderton (p 2-13)
Sloman (p 4-5, 8-9)
a) Scarcity There are only a limited make out of resources on the planet, this causes finite resources. E.g. A family/government is on a fixed budget.
Resources, which are scarce, are called economic goods.
Example of such resources:
* Gold
* Fish
* contaminate water and air are considered economic goods
Polluted water and air are considered economic goods
Oil
* Trees
* Land
Resources, which are not scarce, are called free goods.
Example of such resources:
* Water
* Air
b) Infinite wants adult male have a minimum level of needs, which are obligatory for survival. E.g. Food, Shelter, Clothes.
However, people would rather enjoy a higher exemplification of living because we all have unlimited number of wants. E.g. Ferrari.
c) The introductory economic problem - resources are scarce and our wants are unfathomable leading to the basic economic problem. Because of the B.E.P decisions have to be make on how to allocate the resources. So economic agents (e.g. individuals/firms/government) have to finalise on how to allocate them.
d) Opportunity cost Is making choices. E.g. $40 night out or a shirt?
a. If you spent $40 on a night out the opportunity cost will be the t-shirt.
2
What is an deliverance and what are its rudimentary problems .
ReferencesAnderton (p 10)
Sloman
An economy is a system, which attempts to solve the basic economic problem.
Types of economy:
* Household
* Even though these types of economies are different, all plaque the same(p) problem (BEP)
Even though these types of economies are different, all face the same problem (BEP)
Local
* National
* International
* Free market
* Command
Fundamental problems
1. Q: What is to be produced Quantity Goods/...If you want to get a full essay, nine it on our website: Ordercustompaper.com
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