...central or fundamental economic problem, is one of the fundamental economic theories in the operation of any economy. It asserts that there is scarcity, or that the finite resources available are insufficient to satisfy all human wants and needs. The problem then becomes how to determine what is to be produced and how thefactors of production (such as capital and labor) are to be allocated. Economics revolves around methods and possibilities of solving the economic problem. Economic problem arises mainly due to two reasons- (i) human wants are unlimited (ii) means to satisfy human wants are scarce. Contents [hide] * 1 Overview * 1.1 Opportunity cost and Production Possibility Frontier or Production Possibility Curve. * 1.2 Needs * 1.3 Wants * 1.4 Choice * 2 See also ------------------------------------------------- Overview[edit source | editbeta] The economic problem is most simply explained by the question "how do we satisfy unlimited wants with limited resources?" The premise of the economic problem model is that wants are constant and infinite due to constantly changing demands (often closely related to changing demographics of the population). However, resources in the world to satisfy human wants are always limited to the amount of natural or human resources available. The economic problem, and methods to curb it, revolve around the idea of choice in prioritizing which wants can be fulfilled and how do we know what to produce for...
Words: 1767 - Pages: 8
...satisfy unlimited wants with limited resources?" The premise of the economic problem model is that wants are constant and infinite due to constantly changing demands (often closely related to changing demographics of the population). However, resources in the world to satisfy human wants are always limited to the amount of natural or human resources available. The economic problem, and methods to curb it, revolve around the idea of choice in prioritizing which wants can be fulfilled and how do we know what to produce for the economy. Opportunity cost and Production Possibility Frontier or Production Possibility Curve. The main theory to decipher what and how to prioritise these wants and needs is to look at the opportunity cost (looks at what good must be prioritised first according to needs and how efficiently that the good can satisfy infinite wants). A good way to look at this is the production possibility frontier (PPF) or PPC, this isolates two goods in an economy produced at any one given time to show the effect of what would happen if one changed according to the other and also the effects of new technology and new resources. For example, say that we have isolated two goods, food and clothing, and we look at what would happen if there was increased production of food (there is an opportunity cost of clothes so clothes would go down as food goes up), this varies according to what effects there are including new technology and new resources. Needs Needs are material items...
Words: 1183 - Pages: 5
...Managerial Economics Output No. 1 With regard to a hospital, a state university, and a museum, define (a) a possible primary aim, or goal, of each, (b) some of the constraints under which they operate, and (c) the relationship of (a) and (b) to the study of managerial economics. |Name of Firm |Primary Goals |Possible Constraints | | | | | |San Pedro Hospital |We, the San Pedro Hospital community of health workers commit|Financial constraints | | |to: |Hospital building capacity | | |Provide the best quality and compassionate health care |Availability of hospital devices to | | |services in satisfying all individuals with respect and |perform various tests. | | |reverence of their person; |Availability of medicine for diagnosed | | |Deliver quality satisfying services expected of a training |illnesses | | |health care institution; and ...
Words: 887 - Pages: 4
...An organisation is a formal structure of relationships, responsibilities and authorities through which specific objectives are achieved. 'A work organisation is a social arrangement for the controlled performance of collective goals' (Buchanan and Huczynski, 2004). Purposes of different types of Organisation: Business organisations: To make a profit in a socially standard way. For example: Airlines, Fast food. Non-profit service organisations: They want to help to all of people without any profit. For example: NHS, Universities. Mutual-benefit organisations: Individuals join together to pursue their own self-interest. For example: Clubs, Trade Union. Commonweal organisations: They provide service to all members of a given population. For example: Fire Service, Police. Organisations by their intended purpose: Purpose Primary beneficiary Examples Business Owners Manufacturers, Fast-food, Restaurants Non profit services Clients Universities, Hospitals Mutual-benefit Members Unions, Clubs Commonweal Public at large Police, Public schools Classifying Organizations: Sector classification: Private enterprise organisations: A "private sector" organisation is one that is owned and controlled by private individuals, not the government and usually exists to make a profit for its shareholders. Public sector organisations: A "public sector" organisation is one that is controlled by...
Words: 2322 - Pages: 10
...Discussion Questions Resources is define as organizational resource that makes a business run, and allocate organizational resources for business and make sure it is appropriately done in a competitive environment. It is hard to allocate these resources; business will acquire all the resources that are needed. What are examples of organizational resources? Technology, people, and finances are some examples of organizational resource. These organizations play a vital role in the accomplishment and progress of a business. A technology resource is very important organization it come in several different forms such as; equipment, programs, and devices. A technology organizational resource helps to improve the value and production in a business if incorporated properly. People are another important organizational resource people play an important role in the organization, hardworking and conservative employees who shall not be overlooked. Conservative people can be very distinctive when distinguishing the different between the success and failure of an organization, as well as allocating in a competitive environment. Finance also plays an important role in organizational resources; finance arrives from; investors, stakeholders, and the business as well. Finance is not easy to allocate when the economy is going through rough times and companies must honor their promise to provide value to acquire financial resource in business. How should organizations allocate scarce resource in a competitive...
Words: 472 - Pages: 2
...MICROECONOMICS THE NATURE OF ECONOMICS Economics is concerned with the way limited resources are distributed/allocated among alternative uses to satisfy unlimited human wants. It helps to understand the nature and organization of society and the operation and behaviour of business firms and other economic decision-making units. Microeconomics deals with the economic behaviour of individual units (consumers, firms, resource holders): how scarce resources are allocated among alternative uses; the role of prices and markets. Macroeconomics is concerned with the economy as a whole or the behaviour of economic aggregates – GDP, Employment, Inflation, etc. The economist collects facts that are relevant to consideration of a specific economic problem – descriptive or empirical economics. Economists also state economic principles – generalizes about the way individuals and institutions actually behaves = economic theory. Induction – from facts to theory, from the particular to the general. Deduction starts at the level of theory and proceeds to the verification or rejection of this theory by an appeal to the facts. Positive economics try objectively to predict and explain economic phenomena. It deals with facts and is devoid of value judgement. Concerned with “WHAT IS”. Normative economics is where one’s choice is based on subjective value judgement. It deals with “WHAT OUGHT TO BE”. Example: Unemployment is 12 % of the labour force – positive ...
Words: 2100 - Pages: 9
...Allocating Resources to the Project This chapter extends the previous one on scheduling into the area of allocating resources among the activities of a project, or among multiple projects competing for the same resources. The chapter begins with a discussion of expediting project completion times and highlights that by selectively choosing which activities to crash and by how much, we can determine the minimum cost for all possible project completion time. The use of Excel’s Solver optimization routine to facilitate this analysis is also presented. Next, the chapter moves on to the topic of resource loading and in particular highlights the problems of over scheduling resources. The topics of resource leveling and resource allocation naturally follow in the subsequent sections. Finally, the chapter concludes with an overview of several of the concepts Goldratt raises in his provocative book Critical Chain. Cases and Readings A case appropriate to the subject of this chapter is: Harvard: 9-613-020 Space Constructors, Inc. This 3-page case involves a simple project where partial crashing has already been planned but more, and less, crashing is also to be considered. The network has some special characteristics that offer some worthwhile lessons for the student. Answers to Review Questions 1. Given the fact that a project’s resource requirements are clearly spelled out in the project’s action plan, why are PMs so concerned with resource allocation? ...
Words: 4936 - Pages: 20
...Allocating Resources to the Project This chapter extends the previous one on scheduling into the area of allocating resources among the activities of a project, or among multiple projects competing for the same resources. The chapter begins with a discussion of expediting project completion times and highlights that by selectively choosing which activities to crash and by how much, we can determine the minimum cost for all possible project completion time. The use of Excel’s Solver optimization routine to facilitate this analysis is also presented. Next, the chapter moves on to the topic of resource loading and in particular highlights the problems of over scheduling resources. The topics of resource leveling and resource allocation naturally follow in the subsequent sections. Finally, the chapter concludes with an overview of several of the concepts Goldratt raises in his provocative book Critical Chain. Cases and Readings A case appropriate to the subject of this chapter is: Harvard: 9-613-020 Space Constructors, Inc. This 3-page case involves a simple project where partial crashing has already been planned but more, and less, crashing is also to be considered. The network has some special characteristics that offer some worthwhile lessons for the student. Answers to Review Questions 1. Given the fact that a project’s resource requirements are clearly spelled out in the project’s action plan, why are PMs so concerned with resource allocation...
Words: 4973 - Pages: 20
...case | Name or names of the person created the final output | 4 | 3 | People Management, The Mantra For Success: The Case Of Singhania And Partners | Ashish.K.AgarwalKaran BabarChitra BenganiDebasmita NandyDeepak PoddarDhananjay DixitGourav Mukherjee | Problem Statement How can Singhania And Partners sustain its successful people management system in future? | System | EA Factor (Political, Economic, legal etc.) | Implications on the problem | Political : | As more and more countries (for ex. China, Korea) are increasingly liberalising their legal services, the Indian Government may also follow the path. Thus competition may increase immensely in the sector, an increase in the attrition rates has already created a scarce of resource of legal professionals. Thus Singhania And Partners can also face the heat. | Economic: | There is a scarcity of legal professionals in India, and the scope of work increasing consistently (Starting with the liberalisation of Indian Economy to current outsourcing scenario). Thus it is very important for Singhania And Partners to maintain its people management system. | Legal: | Currently foreign law firms are prohibited from giving any legal advice that could constitute practising Indian law. This is an advantageous situation for Indian law firms like Singhania And Partners as it increases their work horizon and decreases the competition. | Social: | As India’s legal system is slow, the companies preferred arbitration over going...
Words: 1518 - Pages: 7
...Module 1 Assignment Jacqualynn Mejias Saint Leo University When people are given resources and a set of rules on how to allocate the resources and there are enough resources for everyone to get some it is very easy to determine who gets what. The simplicity goes away when people have to allocate a scarce resource. It would be nice to say that people’s ethical beliefs do not play a role in decisions that have to be made, but that is not the case. Ethics, virtues and values are involved in most decisions that are made. When allocating resources, especially scarce resources there are tough decisions that have to be made to determine who is entitled to get the resource. In order to understand how ethics can play a hand in who is going to get a scarce resource, one must understand exactly what ethics are. Ethics are the basic concepts and principles of right human conduct (“Business Dictionary”, 2013). There are social norms and usually the country is divided on what they deem to be ethical, but there are issues that most everyone agrees with. There are also values and virtues. A value is what a person or their culture value as far as morals and character, for example, being on time or always being neat can be seen as a value. A virtue is more about expressing character, and example of virtue would be loyalty (Sheryl, 2010). All of these play into how people arrive at the decisions they make. When thinking of a difficult decision it is easy to see how ethics, virtues and...
Words: 751 - Pages: 4
...Health Care and Social Responsibility June 10, 2012 Administrative Ethics Biomedical ethical issues are seen frequently in the news and are in constant scrutiny. The demand for social responsibility is high and available resources are limited. Healthcare leaders are faced with numerous administrative issues regarding patient privacy, research, confidentiality, and terminal illness. Much debate has surrounded medical spending on the terminally ill, such as the cost and allocation of resources toward end-of-life care. Choosing between prolonged life and quality of life are two seemingly difficult decisions to make. Nonetheless, it is difficult to base one’s opinion until cancer has taken over one’s life. A close look at administrative issues surrounding end-of-life care will demonstrate the impact on a population, ethical and legal implications, potential solutions to the problem, and managerial responsibilities. Impact of Ethical Issue on the Population The Northern Mariana Islands (NMI) is a part of the United States territory since its establishment of commonwealth in political union and is home to approximately 44,000 people (Central Intelligence Agency, 2012). Because of the increase in chronic diseases and lack of available resources, several residents are referred to go off the island to seek health care in Guam and Hawaii (Doty, 2012). However, the medical referral program has a crucial problem with financing treatment at referral facilities. Some patients...
Words: 1226 - Pages: 5
...For an orgnanisation to succeed, it needs to allocate its resources and managerial attention in an efficient way. resource allocation is a process by which a company decides where scarce resorces should be be used in production of goods and services. It is ia complex process and iy occurs at every level nad every day in all companies. According to Barney & Hesterley 2010, the organizational culture and ritual in a firm that would direct all the employees in the organization to define their jobs in competitive and fiscal terms leads to gain sustainable competitive advantage A resources in andn organisation includes such things as labour, machinery human resource technology capital and land Resources are always scarce and therefore management need to use the resources of a company in an effective way to get the maximum value. For example , a saleswoman must decide which customer to call on today, and which customer she will not visit. When meeting with the customer, she must decide which products to emphasize in the conversation, and which to ignore. Every day that an engineer who is a member of multiple product development teams comes to work, he or she needs to decide which of those projects to work on that day, and which to put on the back burner(Clayton M. Christensen and Tara Donovan ) Resource allocation there for may mean creating customer needs and wants in a most profitable way. it is a central management activity and it allows for strategy execution. Understanding...
Words: 1496 - Pages: 6
...ways of allocating scarce resources. Explain how resources are allocated in a free market economy? Scarcity is the availability of resources in limited amounts relative to unlimited nature of human wants that the resources are meant to satisfy. According to Richard G Lipsey It is the basic economic problem that is arises because people have unlimited wants and limited resources. Because of scarcity the economic decision must be made to allocate resources efficiently. When we talk of scarcity within an economic contest, it refers to limited of resources not lack of riches. These resources are the inputs of production land, labour and capital. People must make choices between different items because resources necessary to fulfil their wants are limited. These decisions are given up on want to satisfy another. Market economy enables mutual beneficial between producers and consumers and relies on markets to solve the economic problem, is called market economies. In a free market economy, resources are allocated through the market of free and directed forces of markets. This means that what to produce is determined by the consumers, how to produce is determined by producers and who gets the product is determined by the purchasing power. Markets economies work by allowing the direct interaction of consumers and producers who are pursuing their own interest. The pursuit of self interest is at the hand of free market economy In a free market economy resource allocation is determined by...
Words: 1122 - Pages: 5
...Scarcity, Choice, and Cost All choices mean that one alternative is selected over another. Selecting among alternatives involves three ideas central to economics: scarcity, choice, and opportunity cost. Scarcity Our resources are limited. At any one time, we have only so much land, so many factories, so much oil, so many people. But our wants, our desires for the things that we can produce with those resources, are unlimited. We would always like more and better housing, more and better education—more and better of practically everything. If our resources were also unlimited, we could say yes to each of our wants—and there would be no economics. Because our resources are limited, we cannot say yes to everything. To say yes to one thing requires that we say no to another. Whether we like it or not, we must make choices. Our unlimited wants are continually colliding with the limits of our resources, forcing us to pick some activities and to reject others. Scarcity is the condition of having to choose among alternatives. A scarce good is one for which the choice of one alternative requires that another be given up. Consider a parcel of land. The parcel presents us with several alternative uses. We could build a house on it. We could put a gas station on it. We could create a small park on it. We could leave the land undeveloped in order to be able to make a decision later as to how it should be used. Suppose we have decided the land should be used for housing. Should...
Words: 656 - Pages: 3
...literatures that are considerably helpful in conducting this study. This chapter encompasses the following categories which are mainly the economics and its meaning, the benefits of knowing economics and reasons why people are oblivious about economics. Economics and its Meaning People of today’s generation are only aware of economics as an activity in which only supply and demand of a certain product is concerned. According to Robbins (2013), Economics is the study of given ends and scarce means. It is the science which studies the human behavior as a relationship between given ends and scarce means which have alternative uses. In connection to this, Economics is all about making choices. Meanwhile, Caplan and Henderson (2013) stated that Economics is not just about money. It is about weighing different choices and alternatives. Some of those important choices involve money and some do not. Kling (2007) agreed that the conventional definition of Economics as dealing with the allocation of scarce resources among competing ends applies. However, he added that some of the most interesting economic...
Words: 842 - Pages: 4
