Economics Essay

What Is Economics About

1

* The economic problem can be summarised below.

 Our wants are unlimited

 Resources are scarce - that is the resources we have to satisfy our wants are limited

 Since we cannot satisfy all our wants we must choose between them

 There for we need to rank out preferences - will choose our highest preference wants first, and leave some unsatisfied.

* Essentially the study of economics is all about attempting to solve the economic problem.

* Wants can be defined as the material desires of individuals or the community.

* Individual wants are the desire of each person.

* Collective wants are the wants of a whole community.

* Key economic problems:

 What to produce?

 How much to produce?

 How to produce?

 How to distribute a product?

* Opportunity cost:

 When we satisfy one want, we are giving up the opportunity of satisfying some alternate want.

 Individual has limited resources and request individual wants.

 Businesses have scarce resources but have collective wants.

 Government have limited resources and have collective wants.

* Economics factors underlying choices:

 Individuals: economic choices being made by are shaped by factors including their age, income, expectations, future plans and family circumstances. Some people want to take a risk and others don't. All choices made a aimed to receive a better standard of living in return.

 Businesses: production and resource use, price of products, industrial related issues, wages .etc.

 Government: plays significant influences over the economics choices of individuals and businesses. They decide on tax rates, minimal wage .etc.

How Economies Operated

2.

* Goods and services are the outcome of the production process. They're product which satisfies our wants and needs.

* A factor of production can be defined as any resource that can be used in the production of goods