Question

Using complete sentences and proper grammar, thoroughly discuss each of the 4 concepts you have chosen (Minimum of 100 words for EACH concept):

During this class, several different macroeconomics concepts were covered.

Select any 4 Macroeconomic concepts/topics/assignments we have covered thus far in class, list them, and explain how the economic concept(s) impacts you.   Explain and support your answer (examples are encouraged!)

Examples of topics/concepts: Supply and demand, Diminishing marginal utility, international trade, etc. Thank you!!!!

Answer 1

QUESTION-1

CONCEPT OF DEMAND-

in the macroeconomic term,aggregate demand is a term,when a person wants to buy and has capability to pay for the goods and services demanded by the person.there is generally inverse relationship between price and demand therefore when the price increases the demand decreases and vice versa.

In the above diagram it can be observed that when the price is decreased from P to P1 the quantity demanded increased from Q to Q1

example-suppose when the price of a product was $10 a person was consuming only 2 units of that good but when the price falls to $5 the demand for the commodity was 4units.this shows the inverse relationship.

QUESTION-2

CONCEPT OF SUPPLY-

supply is a concept where producers are producing various kind of goods and services and are selling it to consumers in consideration of money.there is a positive relation between price and supply.when price increase the suppliers are encouraged and thus they supply more quantity.

EXAMPLE-suppose when the price of a product was $ suppliers were supplying only 2 units of the good but when the price increased  to $10 the supply of the commodity was 4units.this shows the positive .relationship.

EQUILIBRIUM POINT-

when the demand curve and the supply curve intersects each other this is known as equilibrium point.determination of price and quantity supplied is taken on this particular point.

QUESTION-3

INTERNATIONAL TRADE-

international trade is concerned with open economy.in this concept a nation carry out various trade dealings with different countries of the world concerned with different kind of goods and services in the economy.country exports those goods which are available at a surplus level and import the goods which are at deficit level in the country.

EXAMPLE-India has surplus production of wheat and pulses so it can export it to USA and it lacks in the production unit of technological unit so it can import it from USA.this deal would be termed as international trade.

QUESTION-4

DIMINISHING MARGINAL UTILITY-

diminishing marginal utility implies that when additional unit of a good is consumed then the consumption derived from the current product is less than the previous one.this means with each additional unit of consumption the marginal utility keeps diminishing.

EXAMPLE-suppose when you consumed first glass of water you were satisfied but when you consumed the second glass of water it didn't give you the same level of satisfaction.the difference in the consumption level is known as diminishing marginal utility.