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Need a draft on these concept on the options listed for each of the applications and draft an essay for each of the applications listed below.

1. APPLICATION 1 - SCARCITY/INCENTIVES: - OPTION 2: ““THE ECONOMIC SOLUTION TO SPAM”

2. APPLICATION 2: OPPORTUNITY COSTS: - OPTION 1: DON’T FORGET THE COSTS OF TIME AND INVESTED FUNDS

3. APPLICATION 3: Law of SUPPLY AND DEMAND: - OPTION 1: LAW OF DEMAND AND CIGARETTES

4. APPLICATION 4:  Market Analysis (Equilibrium)  - OPTION2: Equilibrium: HONEYBEES AND THE PRICE OF ICE CREAM

Answer 1

APPLICATION 1
SCARCITY AND INCENTIVES

Scarcity is one of the most common problem in Economics and it leads you to further to the 2 most important question that is what to produce and how to produce. For eg Oil is a scare good and when we consume a larger quantity of it, its demand starts to fall.This leads to increase in the price because of which the demand then falls.
This will lead to further to come up with better resources and alternative sources of energy.
Linking it with the Economic solution to spam. This problem is huge in comparison to what is seems to be initially.
With very limited resources available to us a consumer faces a lot of difficulty because of these spam messages. This is nothing but a negative externality on which you have no control. Even one of the research paper states that companies spend billions to avoid these spams. Ferris Research shows that world wide expense on Spam in 2009 was 130 billion. Infact the ratio of cost to the society because of spam and the benefit received by these spammers is 100:1. Mentioned by another research paper that 382 millions mails forwards leads to 28 sales. So, which such huge cost being incurred in comparison to the benefits received. So, the solution which we can come to is to put pigouvian taxes on these spammers and as well as on the consumes who responds to these spam emails so that by this we can in overall reduce the number of responses that these spammers receives. One can even put penalties on the consumer who buy goods from these spammers and helps them increase their profits.

2) Opportunity Cost

Opportunity cost is the cost incurred for choosing one alternative over the oher alternative. The basic example is if you have money say 1000 and instead of putting it in a bank which gives you a interest of 10% you have rather preffered to invest it in the stock market which gives you 6% return. So, by opting to keep the money in stock market we forgo the interest of 4% that is 400 Rs and this is your opportunity Cost.

FORMULA
OPPORTUNITY COST- RETURN ON THE BEST FORGONE OPTION - RETURN ON THE CHOSEN OPTION

Opportunity cost of time can be explained with another example.
If instead of going to the office you wish to go for the movie then the opportunity cost of spending 3 Hours in a movie theater is your salary loss for that day. You could have gone to office and worked. The time could have been used to read something. So the opportunity cost is your wage and the time lost.
Similarly opportunity cost also helps companies make there various investment decisions.

3) Law of demand states that the demand for a good rises as the prices falls and it falls as the price rises. The good becomes expensive and thus the demands falls when the price rises. This leads to downward sloping demand curve. On the contrary the Law of supply states that as the price increases the supply also increases. Supply curve thus is upward sloping.
The point where both of these curve meets is known as the point of equilibrium. At this equilibrium point DEMAND= SUPPLY
Thus this whole helps consumers and producers make there decisions in the real world and determine prices and qty demanded and supplied.
Coming to the cigarettes realtionship with demand curve it is considered by a lot of scientist as different. A lot of studies have witnessed that cigarettes have both negative and positive relationship with respect to price. Considering that it does follow the usual demand relationship a rise in the price of cigarettes leads to fall in the consumption of cigarettes.

4) MARKET ANALYSIS
Market equlibrium is a state where demand in the market is equal to the supply in the market. The price thus determined is the price where there is no excess demand or excess supply.
If the market is in equilibrium the equilibrium price will not change unless and untill some external forces will change either demand or supply.
In case of Ice cream the market equilibrium will be at a position where the demand for the ice creams is equal to the supply of ice creams. If the demand for ice creams will be more that is there is an excess demand over supplyof ice creams. It will lead to increase in the price of ice creams because of which the demand will fall down and will come back to its equlibrium position.