Question

Briefly explain

• Scarcity
• Opportunity Cost
• Law of diminishing marginal utility
• Marginal analysis
• Economies of scale

Answer 1

1 .If you talk in simple terms then scarcity simple means that there is limitation of resources that is distributed across the world and economics whole idea depends on it

there is limitation of resources and they must be used in a proper way so that there is optimal output

2 opportunity cost comes from the concept of scarcity because

it tells for selecting the next best alternative

since we have limited resources so we have to choose the best option that foregone cost is lower as compare to gain

it is given simply by the ratio of what we give up to the what we gain

3 law of diminishing marginal utility states that as there is rise in the consumption of any good that is normal normalThat is normal good then the utility will decrease

utility also called satisfaction

4 marginal analysis is rightly used by different companies which simply mean that change after adding one extra additional unit of quantity

for example if we want to calculate the marginal cost then it is the cost that is generated by producing one extra additional unit of output

5 Economies of scale is for companies which says that in the long run as there is rise in the production then its price for producing each next good decreases which is also called there is fall in the average cost