...Tina Campbell 67212 Micro Application Paper #l ECONOMIC PRINCIPLE: Scarcity -- How it forces us to make choices which result in opportunity cost. Economists define scarcity by having seemingly unlimited human wants in a world that has limited resources. Simply put, regardless of the resources available, humans will always want more, therefore, the resources will never be enough. Opportunity costs can be explained in what one thing costs by having another. We have unlimited needs but not unlimited resources so we must constantly make choices about the things most important to us. When we do that, we are weighing the opportunity costs and where we derive the most pleasure or enjoyment. Scarcity and opportunity costs are related because of the unlimited wants with limited resources. It’s a give and take relationship. “If I take ‘A’, I have to forego ‘B’.” Our choices are defined by the resources. As income goes up (capital resource), our opportunity costs might change but scarcity never ceases. Scarcity and shortage are not the same thing. Scarcity exists because humans have unlimited wants regardless of the resources available. A shortage exists because at a given point in time, a shortage of a particular is there because the supply and demand don’t match up. The demand is greater than what the suppliers can or are willing to deliver. Economists cite opportunity costs when they talk about the benefits you could have gotten if you had used an alternative...
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...Scarcity Think of a thing that you like to have. What would your life be like if you suddenly couldn't get any more of it? People deal with this kind of problem every day. It's called scarcity. It comes from the word scarce, which means there isn't a lot of it or it isn't always available. Some fruits and vegetables are scarce in markets sometimes because those fruits or vegetables grow only at certain times of the year. Because the supply of fruits and vegetables is lower, there is a better chance that those fruits and vegetables will be scarce, or not always available. You may find that the market has no strawberries at all. Why? Either no shipments of strawberries came in, or so few strawberries came in that by the time you got there, they were all gone. What does this mean for the demand of strawberries? If enough people want strawberries when none are available, then the demand is quite high. And the demand is high not because the price is low (as is usually the case) but because the supply is low. An older person in your family can probably tell you about a time 30 years ago when there was a gasoline shortage. At that time, in the 1970s, gasoline was scarce. Many people wanted to buy it, but only a certain amount was available. This is a great example of scarcity: Wants are more than what is available. The supply was low. Because the demand was greater than the supply, the gasoline was scarce. So how does scarcity relate to supply and demand? Scarcity is a measure...
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...shoes. Bundle | Shoes | Ghutra | Total | Opportunity Cost | A | 34,243 | 20,327 | 54,570 | 0 | B | 40,000 | 14,570 | 54,570 | -5757 | Enter Opportunity Cost This sounds a considerable measure like open door cost. Opportunity expense is the most noteworthy esteemed option inescapable in the quest for an action. The open door expense of delivering Shoes is the inescapable creation of ghutra. Here are a couple numbers to represent. * As the economy moves from A to package B, the generation of shoes increments from 34,243 to 40,000 and the creation of ghutra abatements from 20,327 to 14,570. * Keeping in mind the end goal to deliver the shoes, the economy must change assets from ghutra creation to shoes generation. * All things considered 5757 ghutra are offered up to deliver the 5757 shoes. * The open door expense of delivering the 5757 shoes can be effectively determined....
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...The purpose of business activity: People have unlimited wants + Limited Resources = Scarcity The cause of shortage or scarcity of goods and services is that there are not enough factors of production. The four factors of production are: * Land- This is the term used to cover all the natural resources provided by nature e.g. Forests, oil, Gas, metals… * Labour- the No. of people that make the product or produce the service. * Capital- the Finance inputted in a business * Enterprise- the skill and risk-taking ability of a person who uses the factors of production together to produce a good or service. (Owner of a business) There are limited resources but so many wants. We therefore have to decide which wants we would like. We would inevitably have to give up something by making this choice. This leads to opportunity costs- the next best alternative given up by choosing another item. Specialisation- occurs when people and businesses concentrate on what they are best at. It’s common because the technology that specialists use are available and most people are aware that higher living standards can be achieved by being a specialist. Advantages: * Workers are trained in one task so they are more efficient * Less time is wasted moving from one workbench to another Disadvantages: * Workers can become bored doing the same thing * Is one worker is absent no one else can work Business: * Combine scare factors of production to produce...
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...Water is the natural resource that man and all other living creatures cannot do without. In fact, it is one thing scientists look for in other planets to confirm possible sources of life. For us humans, it is so important that in 1995, World Bank Vice President Ismail Serageldin said that “the wars of the next century would be fought over water” and not oil. Unfortunately, water is also one resource that we always take for granted and end up wasting through inefficient use and pollution.To make matters worse, what precious supply we have in our reservoirs and aquifers is now threatened by less rainfall as a result of the occurrence of a strong El Niño phenomenon which is expected to hit the Philippines by October 2015 until the first quarter of 2016. To ensure that there is enough for everyone’s needs, water distribution is already being interrupted or rationed in several parts of Metro Manila and surrounding areas.A shortage in water supply not only leads to less water for us to use for our domestic needs, but also threatens food production and energy supply. Angat Dam in Bulacan, for example, provides almost 97% of Metro Manila’s domestic, municipal and industrial water requirements, as well as 27,000 hectares of rice farms in Bulacan and Pampanga. It is also utilized to generate 246 megawatts of electricity.It is therefore important for each of us to do what we can to ensure that we do not deplete this supply. By learning to use water prudently and efficiently, not only during...
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...DEMAND OF PHYSICIANS: In terms of quantity, it shows that people in the United States are willing to pay minimum prices to get healthcare. The demand for physicians is dependent on many factors. Some of the factors are but not limited to income of the people, population, behavior of the buyers, expectations about future prices and incomes. According to reports and past projection, there is shortage of physicians in the country. This directly influences the policies and prices of the current healthcare system. Due to this shortage, we have more medical schools in the country. The government has also been subsidizing admission to such schools. At present, there are about 900,000 physicians working in the market for 300 million patients or customers. So clearly, the population of customers is large. The price at providing healthcare has gone up due to scarcity of professionals and limited amount of income people can spend upon healthcare. The behavior of buyers is such that they want to spend as much less as possible on getting healthcare now, because they expect the price of getting healthcare to shoot up. So they want to save money now in order for rainy days, when they would really need it. Demand: Old 691400 New 814700 Health care costs: Old $16834 New $ 22615 PEoD = %change in QD/%change in price %change in price= 22615-19834/16834= .34 %change in quantity= 814700-691400/691400= .18 PeoD = .18/.34=...
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...• Scarcity o Definition: situation in which unlimited wants exceed the limited resources available to fulfill those wants UNLIMTED WANTS. LIMITED RESOURCES • Marking choices, we assume that: o People are rational o They respond to economic incentives o Optimal decisions are made at the margin • ECONOMISTS REASON THAT OPTIMAL DECISION IS WHEN MC=MB • Marginal o Definition=next unit o Marginal cost=cost for next unit o Marginal benefit=benefit for next unit • Opportunity cost o Definition= highest valued alternative that must be given up to engage in an activity WHAT MUST BE GIVEN UP o Lwer opportunity cost= comparative advantage= aka they give up less so should do the duty o Ex: father has kids sweep the shop for him. He can do it if he wanted to, but gives up more because there are other things he could be doing. Since kids have nothing else to do, they give up lessss bc their time is less valued o How it comes up and how it’s used • Capital • Factors of production o Land o Labor o Capital o Entrepreneurship Risk taker • Positive vs. normative o Positive= what is o Normative= what ought to be • PPF(Productions possibility frontier) o Why is it curved, and not linear? o CURVED BC LAW OF INCREASING MARGINAL OPPORTUNITY COSTS BC INCREASING AUTOMOBILE PRODUCTION BY A GIVEN QUANTITY REQUIRES LARGER AND LARGER DECREASES IN TANK PRODCUTIN. • Comparative advantage o Refer to handout o Practice ivy’s method! • Circular flow o Memorize...
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...however, cannot say the same. Water that was once plentiful is now in short supply and no one ever stops to think why. We just continue to use and use like our water is limitless. We never think as much as we should about the affects we have on our supply of water. What happens if we continue to waste away the most precious resource we have? Allen, L., & Woelfle-Erskine, C. (2011). FROM LAUNDRY TO LANDSCAPE TAP INTO GREYWATER. Mother Earth News, (247), 73-78. Laura Allen and Cleo Woelfle-Erskine in their article “From laundry to landscape tap into grey water” (2011), suggest that the use of grey water is a cost effective conservation method. They support their suggestion by showing examples of grey water methods , concluding that “grey water use lowers your water bill, and diverting grey water from over loaded or failing septic systems can extend their life” (para3). Their purpose is to show effective grey water usage methods in order to provide people with the knowledge to perform the practices at home. They can really connect by teaching their audience, who can be the normal, everyday, anybody, they reach out to not only people under water shortages but all people who can reuse their water. Dasmann, R. F. (1972). Environmental conservation (3rd ed., pp.174-184). New York: John Wiley & Sons INC. Raymond F. Dasmann in his book “Environmental Conservation” (1972) (in the chapter he wrote on civilization and water) feels that water shortages are normally solved by...
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...____ ____ ____ ____ ____ 1. Refer to Figure 6-3. In panel (b), with the price floor in effect, there will be a. a shortage of wheat. b. equilibrium in the market. c. a surplus of wheat. d. an excess demand for wheat. 2. The positive relationship between price and quantity supplied is called a. profit. b. a change in supply. c. a shift of the supply curve. d. the law of supply. 3. When quantity demanded decreases at every possible price, we know that the demand curve has a. shifted to the left. b. shifted to the right. c. not shifted; rather, we have moved down the demand curve to a new point on the same curve. d. not shifted; rather, the demand curve has become flatter. 4. When the price of a good is $5, the quantity demanded is 100 units per month; when the price is $7, the quantity demanded is 80 units per month. Using the midpoint method, the price elasticity of demand is about a. 0.22. b. 0.67. c. 1.33. d. 1.50. 5. Which of these statements about economic models is correct? a. For economists, economic models provide insights about the world. b. Economic models are built with assumptions. c. Economic models are often composed of equations and diagrams. d. All of the above are correct. 1 Name: ________________________ ____ 6. The signals that guide the allocation of resources in a market economy are a. surpluses and shortages. b. quantities. c. property rights. d. prices. 7. Economics is the study of a. production methods. b. how society manages its scarce...
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...frozen as glaciers, so only about 1% of the world’s water is actually usable for drinking, cleaning, and irrigating farmlands according to the World Wildlife Fund (Krchnak, 2014). Some populations, industries, and businesses are using up the limited supply of fresh water at an alarming rate for personal gain, leaving many without this vital resource. The water supply is deteriorating as it is becoming ever more polluted from chemical run off from farms and industry, poor water management practices, over use, and expanding populations. This is causing severe shortage problems, skyrocketing water prices, and major environmental issues around the world. Research suggests that over-use of the world’s available fresh water supplies is a major problem, because use is exceeding the ability of nature and water treatment plants to keep up with demand, rising costs have led to a lack of access to safe water for many poor people, and shortages of adequate fresh water cause there to be insufficient water to sustain communities around the world. Water usage and lack of adequate fresh water affects everyone, so should governmental or international bodies play a larger role in maintaining a clean and adequate water supply for everyone in order to protect and provide this essential element for the world’s citizens and allow for growth and expansion of societies everywhere? These are some of the issues explored in this paper. Ecosystems need clean water in order to exist and to continue to function...
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...Will get to meet new people (short-term) | 1. The concept of scarcity relates to my dilemma only in the sense that I would have a shortage of time to do other things if I played a sport, but it does not relate to the me having a limited supply of anything. The concept of choice does relate to my dilemma because there are certain things I would have to choose from if I decided to play a sport. As an example, I would have to choose between having more free time or having a higher opportunity of earning scholarships. Lastly, opportunity relates to my dilemma because I would possibly have a better chance of going to a superior college if a played a sport, or even getting a scholarship. 2. When making a decision, the costs and benefits are always important to me because I have to make sure I make the best decision and I will not regret that decision later on. Based on the chart, the benefits would have more of an impact of my life because they would give me an opportunity to possibly have a better future if I decided to play a sport. 3. Based on the costs and benefits from my chart, my final choice will be to play a sport. This is the best decision over not playing a sport because of the chance to earn scholarships, which could help me go to college because if I did not earn a scholarship my parents might not have the financial means necessary to send me to college. Yet, if they could, due to that same problem, I might not have the opportunity to go to a superior college...
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...ECONOMICS 31 101 Economics is fundamental to everything we do. Each day we take decisions on economic grounds: • how much to spend on different types of goods and services • whether to travel by bus or train • whether to eat in the Union or in a local pub/cafe • whether to buy textbooks or clothes Others also take decisions which have an impact on us: • companies decide to raise/lower their prices • government may change income tax, vat, student maintenance allowances, tuition fees TV, radio and press commentators are constantly examining the implications of decisions and choices. Scarcity - The Central Issue Taking decisions/making choices - made necessary by scarcity: the volume of goods and services which can be produced is less than the amounts people want to have. Page 1 of 30 Scarcity arises because resources to produce goods and services are limited. Resources (factors of production) are: 1. Labour - human resources (labour force) are limited in number and skills 2. Land and raw materials - natural resources 3. Capital - manufactured resources: equipment, factories (influenced by technology - how we combine resources) Economic Questions What to produce? Clothes/Food/CDs/Holidays/ Houses/Shoes/Education/ Health Robots/Workers/Gas/Atomic Energy/Solar Power How to produce? For whom to produce? Pensioners/Students/ Lawyers/Journalists/Dentists/ Shop Assistants/Pilots Page 2 of 30 APPROACHES TO ECONOMIC QUESTIONS MICROECONOMICS (individual) consumers...
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...known, knowing that each season lasts three or four months, then there are four or six months of sales. The difficulty of the sector companies to change the trend involved high storage costs and the costs of destroying or selling the surplus to traders in markets, potential stock-outs, shortages or overstock garments. For consumers, the fashion industry were in equilibrium, you agree the rules of the game and in the case of the latest fashion season is very expensive and had good quality fabric, but if the purchase is not urgent there was the near certainty of getting the same item during the sales at substantial savings. In contrast, Zara has changed the rules, creates a need to purchase the product shortage. Inditex success is based on the store as the axis and core business, design as strategic key and the time factor in the manufacture of the goods. Each of the 3,250 stores shelves renewed twice a week, which gives an idea of ??its great flexibility. For Zara most important and which marks its success is to keep clients understand that if they see something they like should buy at the moment, because next week is no longer in stores. The idea is to create a climate of opportunism-scarcity. Zara’s competitive advantage, in part, is in logistics, production just in time ‘, has the ability to completely revamp everything in their stores in a few weeks. Inditex also has the advantage of storage in Europe, Zaragoza, their competitors have not seen the benefits of a logistics...
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...more should we not look closely to the minute details of what constitutes the economy. Therefore we studied microeconomics, the study in where every single person with the capacity to choose is screened closely. It answers the questions of why an individual chooses an option and what causes him to choose that way. Say for example, why a commercial bank manager decides to buy a new townhouse and loan a new car or why someone would decide to go to into business instead of getting employed. In this we cited the basic reasons such as the when to produce, what to produce and whom to produce; questions that is essential in putting up a business. The usual idea is to produce when there is a demand for a certain thing; to produce something that separates itself from the rest of the same product available in the market and is currently wanted by the consumers; and, to look for new ideas of products that might be useful for a specific group of people. Upon setting economics in a microscope, we would now appreciate the trends and tracks of the economy in a greater whole. The individuals will form a group and larger into a companies and corporations. These industries make up the economy of a country and will therefore participate in the foreign exchange and international trades. Again, microeconomics and macroeconomics are parallel lines wherein whatever individuals do will make an impact to the larger sector such as the country or business organization, thus making every person liable for...
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...Luz Figuereo Professor Allen Sauberman March 7, 2012 Paper #1 Chapter 1 Key Points: 1. Economics is the study of choices we make among our many wants and desires given our limited resources. 2. Self-interest is not the same as selfishness. For example, Mother Theresa who spent her life caring for others, her work could be considered done because of her self-interest but who would consider it selfish. 3. Ceteris Paribus which means “holding everything else constant”. Basically when trying to asses the effect of one variable on another, you must keep the relationship between the two variables isolated from other words. 4. Fallacy of composition states that if something holds true to one person it does not necessarily mean it would be true for many individuals in a group. 5. Positive statements are attempts to describe what happens and why it happens, while normative statements are attempts to prescribe what should be done. I understand what economics is and the basis of how and why economists try and predict the behavior of the consumers. How they observe, and come up with a hypothesis. I also understand the differences between macroeconomics and microeconomics. Lastly, what would be considered macro and what would be considered micro. Chapter 2 Key Points: 1. Human capital is the productive knowledge and skill people receive from education, on the job training, health and other factors that increase productivity. 2. Opportunity cost is the...
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