economic concepts and how they apply to the world around us

Solutions

Expert Solution

Economics involves production, distribution and consumption of goods and services. In other words simply allocation of limited resources with unlimited wants in the society.

There are five basic concepts in economics which are as follows:

1) Demand and supply- Basically demand is the quantity of goods a consumer wants to purchase during a period of time and supply is the quantity of goods a seller wants to sell at a particular price in a given period of time. Supply and demand is the main component of the market. Whole world is driven by this supply and demand principle. Direct relation of economic growth with market's supply and demand. More demand more profits higher will be the price. High supply less demand less profits. For example, crude oil demand in the market depends on the demand high demand high price are charged from the countries. More profits the world economies are growing and becoming wealthy.

2) Scarcity- The world has limited resources that means scarcity of resources with unlimited wants. For example, when people died because of famine in 19th 20th century when there were scarcity of food.

3) Cost and efficiency- Basically people would prefer the opportunity cost concept which means choosing the next best alternative for forgone product. They will try to maximize profit and minimize costs. Every rational consumer in the world follows the same concept.

Economic efficiency means when maximum output is obtained from the given set of inputs with minimum wastage. For example, nowadays technology has replaced the the human labors. Because it provides economic efficiency around the globe with saving cost and maximizing profits.

4) World of specialist- Professionals and experts are running the world. Because specialization of labor minimizes the costs of the company because he gets efficient in one work which increase the production, distribution and consumption. For work efficiency specialist are working for the companies in the economies.

5) Rewards and benefits- whole world is driven by this concept if someone will find his benefit in the tast then only he will prefer it otherwise not. Maximizing profits, minimizing costs, maximize output and minimize inputs are all the examples comes under this concept.

Big-big companies are giving bonuses and rewards to their employees in the form of cash and gifts.

Rahul Sunny answered 1 month ago

Next > < Previous

Related Solutions

What is culture and why is it significant in the world around us?

we have discussed various aspects of accounting and how it relates to the world around us....

we have discussed various aspects of accounting and how it relates to the world around us. Thinking about what you have learned from this course, how could this knowledge be used in your everyday life? Consider such factors as personal organizational skills, financial awareness, financial accountability, or professional career growth.

What is the extent of economic inequality, wealth, and poverty around the world?

How can we, as economists, measure long-term economic growth for countries around the world? How can...

How can we, as economists, measure long-term economic growth for countries around the world? How can some nations with few natural resources, such as Japan and Singapore, be relatively wealthy? How can other nations with vast amounts of natural resources, such as Nigeria and Russia, be relatively poor?

List major stock exchanges in the US and around the world. Discuss some of the important...

List major stock exchanges in the US and around the world. Discuss some of the important characteristics of each of these exchanges.

discuss Kidney Donation Systems Around the World (not the us), no need to add a graph...

discuss Kidney Donation Systems Around the World (not the us), no need to add a graph here. Explore the policies that are currently implemented across the globe (i.e. some discussed in the articles include - routine removal, presumed consent, organ donor points, "no give, no take", etc.). Evaluate the limitations of these policies. Also consider how these policies fare in terms of the efficiency vs. equity debate. (You do not need to critique them all, just select from 2 or...

a. Identify and describe the 3 economic systems that govern economies around the world. Outline the...

a. Identify and describe the 3 economic systems that govern economies around the world. Outline the strengths and weaknesses of each system. What do you think is the best type of market system to govern an economy? Why? Use online resources and your textbook to identify a specific economy that follows each economic system discussed above. How have these countries done in terms of economic performance? Has one economic system produced better economic results than others? Please provide details from the countries you...

To this Question "There are different economic systems used around the world, with varying results. Which...

To this Question "There are different economic systems used around the world, with varying results. Which system do you think is best and why? What role does human nature play in determining how these systems may succeed?" (Dont answer quoted question) was answered by 2 people, Reply to each of their repsonses. 1. "Economic systems are an organized way in which a state or a nation allocates, produces and distributes its resources and apportions goods and services within a society....

Discuss data collection methods used in the world around us. Tell us what method (random sample...

Discuss data collection methods used in the world around us. Tell us what method (random sample , convenience , stratified,cluster)is used.Discuss the motivation of the organization collecting the data for utlzing the method . Any positives or negatives to such a technique .

Many companies around the world, including those in the US, have outsourced goods and services to...

Many companies around the world, including those in the US, have outsourced goods and services to India and China. However, some of these businesses have reversed course and are now insourcing these goods and services. Do you agree that this course reversal may be justified?

Subjects